Bakken and Three Forks Oil

Brian Hicks

Written By Brian Hicks

Posted May 2, 2013

Good news for oil and gas investors out west.

A recent report by the U.S. Geological Survey officially revised reserve estimates to 7.38 billion barrels of oil and 6.7 bcf of undiscovered and technically recoverable natural gas in the Bakken Shale and Three Forks formation.

This is a huge jump from the numbers in an initial 2008 report, which assessed 3.6 billion barrels of oil and 1.7 bcf of natural gas. The report excludes already-tapped reserves.

The USGS has traditionally been conservative in its estimations, so there could be another report exceeding the current estimate in the future.

The report should come as no surprise, given how much output the Bakken has yielded to oil companies in recent years.

But the report also differs from the others because it includes the virtually untapped formation known as Three Forks with the Bakken assessment.

Data compiled by Bloomberg shows output from the Bakken grew 39 percent in the past year to 715,000 bpd. Texas is the largest producer of oil in the United States, and North Dakota trails in second.

USGS estimates that approximately 450 million barrels of oil have been recovered from the Bakken area since its last survey. And the fact that reserve estimates have increased since then will surely keep the Bakken boom alive for many years to come. Now, Three Forks could attract new oil companies and investors in the area.

Three Forks is a new frontier and an exciting addition to the Bakken boom and western drilling operations.

The Bakken is made up of three layers of sediment. The upper and lower layers are black marine shale, and the center layer comprises siltone, sandstone, mudstone and dolomoite.

Below that is the Three Forks formation, which also has multiple layers of compact rock, amounting up to 270 feet in thickness.

Three Forks

Within the 7 billion figure, over 3 billion barrels of oil are concentrated in Three Forks. As you can see, Three Forks lies under the Bakken and encompasses North Dakota, South Dakota, and Montana.

bakken three forks mapSource: EPRINC


North Dakota has been an area of steadfast economic growth in recent years, and the states that make up Three Forks will surely benefit from drilling operations as more companies begin to invest in the unknown territory. The formation is far deeper than Bakken, and the formation has been deemed unreachable for the past five years.

But thanks to horizontal drilling and fracking, there are more reachable reserves than previously thought.

Where as much as 33 percent of the Bakken has been tested for oil and gas, Three Forks is under-explored at only 5 percent.

Companies in Three Forks

Continental Resources (NYSE: CLR) is one company willing to venture out in Three Forks territory. Continental believes the heaviest reserves are located in the lower portion of Three Forks.

Continental’s estimate for the formation produced a figure of 903 billion barrels of oil originally in place and suggested technically recoverable reserves could be in a range of 36 to 45 billion.

This estimation very generous, but Continental has been one of the pioneers in the Bakken, and the company has investment relations to worry about. Continental outlined its plans in Three Forks since September of 2012.

The company has already conducted its first operating wells, with more wells to come as the company digs deeper.

Marathon Oil (NYSE: MRO) and Sinclair Oil Group are among seven other companies with drilling operations in Three Forks, providing the USGS with information involving the latest technologies that will secure higher extraction rates.

Other companies include Exxon Mobil’s (NYSE: XOM) XTO Energy, Whiting Petroleum Corp. (NYSE: WLL), Cornerstone Energy Resources, and United Energy Group Ltd.

As investment and drilling continues, Three Forks will be a welcome addition as the United States continues to be a top oil-producing nation.

Keep an eye out for Three Forks as it is being developed. 


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