Western North Dakota Energy Project Shale Projection Webinar Series
2014 Regional Updates
An Initiative of theStrom Center at Dickinson State University
AcknowledgmentsOur Analysts:
Lynn Helms, ND Dept of Mineral Resources
Justin Kringstad, ND Pipeline Authority
Dean Bangsund & Dr. Nancy Hodur, NDSU
Our Funders:Bush Foundation
Vision West ND
US Dept. of HUD Regional Sustainability Planning Grant
Our Moderators:Dr. Dick Gardner
Senior Fellow, RUPRI Center for Rural Entrepreneurship
Our Local Host & Coordinator: Deb Nelson, DLN Consulting
Lynn Helms’ Optimistic Scenario
Imagine a cone with the deepest part centered under McKenzie County with 5 pay zones…
Units on outer rings of cone have fewer economic pay zones & thus fewer wells
Spacing Units Wells per Unit Total Wells
1,000 19 19,000
1,000 15 15,000
2,000 11 22,000
2,000 7 14,000
2,000 2 4,000
8,000 74,000
Source, Lynn Helms, ND Division of Mineral Resources
Typical Well costs $8.7 MillionOver 45 years:
• Produces 600,000 Barrels• Generates $20 M in net profit• Pays $4,925,000 in total taxes• Pays $7.6 M in royalties• Pays Salaries of $2.1 M• Pays operating expenses of $2.4 M
Boom Duration:When will drilling & production begin to taper?
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North Dakota Drilling Rigs
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Medium
High
Actual
Total Producing Wells
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,00020
00
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North Dakota Producing Wells
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Western North Dakota Well Projections
1,800 - 3,000 wells/year = 2,000 expected
150-250 rigs = 12,000 – 30,000 jobs
Another 10,000-15,000 jobs building infrastructure
10 wells/rig/yr increasing to 12 by 2015
200 rigs can drill the wells needed to develop spacing units in 18 years
35,000-40,000 more new wells
Recoverable oil = 7.5 Bbl USGS w 3ThreeForks
2,300 – 2,900 wells/year = 2,500 expected
~180 rigs = 20-25,000 jobs
Another 3,400 jobs building gathering systems
12.4 wells/rig/yr increasing to 14.1 by 2022
May take over 25 years to fully develop the 8,000 spacing units
45,000 – 74,000 total Bakken wells
Recoverable oil =10-14 Bbl Helms, 32-36 Bbl Continental Oil
2013 2014
North Dakota State University Model
• Consistent with Helms/Kringstad assumptions
• Rapidly changing technology & other variables led NDSU away from trad I/O models and into uncharted territory
• Most likely or medium, pessimistic or low, & optimistic or high scenarios
• Splits jobs into permanent vs transient
• Is more accurate at regional level
• Communities can affect the local distribution of opportunities, impacts, risks, and growth.
ADAMS
BILLINGS
BOTTINEAU
BOWMAN
BURKE
DIVIDE
DUNN
HETTINGER
MCHENRY
MCKENZIE
MOUNTRAILPIERCE
RENVILLE
SLOPE
STARK
WARD
WILLIAMS
VALLEY
GOLDEN
Region 2
StatePlanningRegion 2
State
Region 1
StatePlanning
Region 8
StatePlanning
Williston RegionMinot Region
Dickinson Region
Major trade centers
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2036
0
10,000
20,000
30,000
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80,000
ND Petroleum SectorTotal Direct Employment 2000 - 2039
LowMediumHighActual
20002002
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20082010
20122014
20162018
20202022
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20282030
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2036
0
10,000
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North Dakota Total Direct Employment
Petroleum Sector Consensus Scenario 2013
Temporary Direct
Permanent Direct
2000
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2010
2012
2014
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2018
2020
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0
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North Dakota Total Direct Employment,
Petroleum Sector, Most Likely Scenario 2014
Temporary, Devel-opment Employment
Long-term, Per-manent Employ-ment
20002002
20042006
20082010
20122014
20162018
20202022
20242026
20282030
20322034
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0
10,000
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ND Petroleum Sector Employment by RegionMost Likely Scenario
Minot RegionDickinson RegionWilliston Region
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Petroleum Employment % of Total Employment 2014
Dickinson RegionWilliston RegionMinot Region
Average Annual Population & Housing Growth (most likely)
Minot Region
Dickinson Region
Williston Region
Permanent Housing
2.6% 7.0% 11.5%
Permanent Population
2.4% 6.4% 11.2%
• Latest comprehensive projection of employment, housing, and pop
• Scenario of likely future; not precise prediction
• Last year’s medium scenario is this year’s low
• Taper doesn’t start until 2020-2030 (and then only levels off)
• Bakken in dynamic state of flux; projections, if to be used to continue planning, should be revised regularly
Conclusions
If you have further questions, please contact:
Deb Nelson, DLN Consulting
(701) 483-2801, [email protected]
Dick Gardner, CRE & Bootstrap Solutions
(208) 859-8878, [email protected]
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