600 east boulevard ave. - dept 405 bismarck, nd 58505-0840 (701) 328-8020(701) 328-8000
DESCRIPTION
North Dakota Department of Mineral Resources. http://www.oilgas.nd.gov. http://www.state.nd.us/ndgs. 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701) 328-8020(701) 328-8000. North Dakota 2011 Major Events. Three Forks second bench was proven economic - PowerPoint PPT PresentationTRANSCRIPT
600 East Boulevard Ave. - Dept 405Bismarck, ND 58505-0840
(701) 328-8020 (701) 328-8000
North Dakota Department of Mineral Resources
http://www.state.nd.us/ndgshttp://www.oilgas.nd.gov
North Dakota 2011 Major Events• Three Forks second bench was proven economic• Eagle-Ford and Utica Shale competition• Worst winter and spring weather in history• Challenges
– Infrastructure– Manpower– Housing– Gas gathering and processing– Oil transportation– Federal regulation– Global Environmental Group interest
North Dakota Oil Production (Barrels / Day)
0
100,000
200,000
300,000
400,000
500,000
600,000
1950 1960 1970 1980 1990 2000 2010 2020
North Dakota Gas Production (MCF / Day)
-50,000
50,000
150,000
250,000
350,000
450,000
550,000
650,000
1950 1960 1970 1980 1990 2000 2010 2020
North Dakota Wells Drilled
0
500
1000
1500
2000
2500
1940 1950 1960 1970 1980 1990 2000 2010 2020
210 rigs
North Dakota2011 Formations of Interest
• Three Forks– 3,382 Bakken Pool wells
• 2,465 Middle Bakken• 625 Three Forks• 228 Upper Shale• 64 Middle Bakken & Three Forks
• Tyler– Same stage as North Dakota Bakken in 2003
• Vertical wells and source rock-storage system• Horizontal success in Montana
North DakotaOil & Gas Taxation
• Gross Production Tax– 5% on oil– July 1, 2011 through June 30, 2012 $0.1112/MCF
on natural gas• Extraction Tax
– 6.5% on oil• 9 exemptions or rate reductions
– Incremental EOR, Tertiary, and Stripper Well now in effect– Oil Price Trigger $50.07
THREE FORKS
BAKKEN
BAKKEN MATURE AREA
Bakken Producer
Typical Bakken Well Production
923
436
153
99 84 76 68 62 55 50 45 40 36 33 29 26 24 21 19 17 16 14 13 11 10 9 8 7 7
0
100
200
300
400
500
600
700
800
900
1000
0 5 10 15 20 25 30
Year
Bar
rels
of O
il pe
r Day
What Does Every New Bakken Well Mean to North Dakota
A typical 2011 North Dakota Bakken well will produce for 29 years
If economic, enhanced oil recovery efforts canextend the life of the well
In those 29 years the average 2011 Bakken well will:
Produce approximately 540,000 barrels of oil
Generate over $20 million net profit
Pay approximately $4,585,000 in taxes$2,200,000 gross production taxes$2,000,000 extraction tax$385,000 sales tax
Pay royalties of $7,500,000 to mineral owners
Pay salaries and wages of $2,100,000
Pay operating expenses of $2,300,000
Cost $7,925,000 to drill and complete
Western North Dakota
• 1,100 to 2,700 wells/year = 2,000 expected
– 100-225 rigs = 12,000 – 27,000 jobs
– Another 10,000-15,000 jobs building infrastructure
– 225 rigs can drill the wells needed to secure leases in 2 years
– 225 rigs can drill the wells needed to develop spacing units in 16 years
– 35,000-40,000 new wells = 35,000-40,000 long term jobs
North Dakota Oil Production and Price
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
Bar
rels
per
Day
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
ND
Sw
eet P
rice
$/ba
rrel
History Bakken - Three Forks P10 Bakken - Three Forks P50
Bakken - Three Forks P90 $/Barrel History & DOE-EIA Projected $/Barrel P50
$/Barrel P10
3,382 Bakken and Three Forks wells drilled and completed 35,700 more new wells possible in thermal mature area Proven=7 BBO – Probable=10 BBO – Possible=14 BBO (billion barrels of oil)
Proven
Possible
Probable
North Dakota Rigs and Wells
0
50
100
150
200
250
300
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
Jobs
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Rigs Wells
Conservative Case
North Dakota Oil Industry Jobs
0
10,000
20,000
30,000
40,000
50,000
60,000
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
Jobs
Prod jobs Gathering jobs Fracing jobs Drilling jobs
North Dakota Oil Production and Price
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
Bar
rels
per
Day
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
ND
Sw
eet P
rice
$/ba
rrel
History Bakken - Three Forks P10 Bakken - Three Forks P50
Bakken - Three Forks P90 $/Barrel History & DOE-EIA Projected $/Barrel P50
$/Barrel P10
3,382 Bakken and Three Forks wells drilled and completed 41,200 more new wells possible in thermal mature area Proven=7 BBO – Probable=10 BBO – Possible=14 BBO (billion barrels of oil)
Proven
Possible
Probable
Expected Case
North Dakota Oil Industry Jobs
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
Jobs
Prod jobs Gathering jobs Fracing jobs Drilling jobs
North Dakota Rigs and Wells
0
50
100
150
200
250
300
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
Jobs
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Rigs Wells
The future looks promising for sustained Bakken/Three Forks
development
Draft BLM Hydraulic Fracturing rule could double federal drilling
permit approval time or worse. Comments due
7/10/12
Draft EPA guidance on diesel fuel in hydraulic fracturing could triple
drilling permit approval time or worse.
Comments due 7/9/12
Current administration budget contains tax changes that could
reduce drilling capital 35-50%
World and U.S. economies continue to struggle. If
China joins the downward spiral oil price could fall enough to make some
areas uneconomic