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The USGS doubled the estimates at the Bakken and Three Forks Shale formations, an increase that some believe is limited by the technology available.
On April 30, the US Geological Survey announced that the Bakken and Three Forks shale formations, located through parts of Montana, North Dakota and South Dakota, could contain an “estimated 7.4 billion barrels (BBO) of undiscovered, technically recoverable oil.” That’s double the original 2008 Bakken Formation estimate of 3.65 million BBO.
However, Continental Resources (NYSE:CLR), the largest leaseholder in the Bakken region, believes the USGS estimate to be quite modest. “The USGS generally is very conservative in their estimates,” Harold Hamm, Chairman and CEO of Continental, told NewsOK. “This is a big step. We’re encouraged by it.”
In 2010, Continental Resources estimated that the Bakken field contains roughly 24 billion barrels of technically recoverable oil out of 577 billion barrels of total oil in place. In 2012, Continental boosted its total oil estimate by 56 percent, to 903 BBO, but has yet to revise its recoverable estimates.
Commenting on the increased estimates was Secretary of the Interior Sally Jewell, who said, “[t]hese world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation’s dependence on foreign sources of oil.”
Technologies like hydraulic fracking have turned the Bakken and Three Forks Formations into the US’s most important source of domestic crude oil. But the technology is limiting.
“The Bakken reserve is huge. It’s a world-class resource, but right now with current technologies, we’re only recovering between 3 and 4 percent so if we can increase that recovery by just 1 percent, it will mean another million barrels of oil,” Tessa Sandstorm communications managers for the North Dakota Petroleum Council told Minot Daily News.
As drilling technologies continue to improve, these resource plays will only get bigger, commented Rick Bott, President and COO of Continental. “The USGS assessment is proving that out. The play is getting much bigger.”
“We feel like in the future the recovery will go up as technology improves and as we try different recovery techniques.” Hamm said.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned in this article.