Bakken Shale's Unending Bounty

Brian Hicks

Written By Brian Hicks

Posted August 9, 2012

North Dakota is rolling in profit. The state currently ranks #2 for oil production nationwide, and the Bakken Shale is promising to allow the state to give Texas a run for its money.

Currently, the Bakken produces around 640,000 barrels of oil daily (as of May). That, by the way, is second only to Texas’s 1.7 million barrels a day. However, Lynn Helms, director of the state’s mineral resources department, recently pointed out that the Shale has consistently expanded its production by at least 15,000 barrels a day every month. Moreover, there are thousands of new wells set to be drilled in the near future.

From Platts:

“We’re seeing back-to-back 5% increases in production,” Helms said. “And we’ve got 35,000 wells left to drill in this Bakken reserve.”

It is estimated that the Bakken will take nearly two decades to hit full developmental swing. Aside from its enormous oil reserves, the shale is also home to ample deposits of natural gas.

But current technological infrastructure means a loss of almost 30 percent of produced gas right at the wellhead. The state, in conjunction with energy companies, are spending around $4 billion for an infrastructure overhaul.

Another pressing problem is the lack of feasible housing solutions for the thousands that flock to the Bakken boom. RVs, “man-camps,” and other temporary solutions can barely handle the influx, and more long-term settlements are appearing fast enough.

Finally, the state’s pipeline doesn’t even have the capacity to handle all that the Bakken is producing. There are several planned pipeline projects that should resolve that issue, but they will take some time.

In the next two decades, as the Bakken begins to reach full capacity, infrastructure plays involved in the area could become highly profitable.

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