A Photo Essay From The Bakken
According to Baker Hughes (NYSE: BHI), at the end of last week, there were 53 rigs drilling for oil in North Dakota. After spending eight hours on Wednesday driving around the heart of the North Dakota Bakken Formation, I had laid eyes on most of them. Today I would like to share a few of my observations about the early stages of the Bakken Shale Boom 2.0.
As I indicated in the previous article, I was in North Dakota to deliver a talk on my company’s efforts to eliminate flaring in oil fields. Following my presentation, a colleague and I drove north from Bismarck into the heart of the Bakken. We were specifically looking for companies that are flaring gas because they are potential customers for our technology.
Let me be clear that a company that is flaring isn’t necessarily doing anything in violation of the law. There are plenty of reasons companies are allowed to flare, but the gas that is flared is a wasted resource. We are trying to utilize that resource. But I don’t want to give anyone the impression that I am suggesting these companies are doing anything wrong.
Here is what we saw on our drive. (I took all of the photos shown below myself). As we drove up into the southern portion of the Bakken, the first wells we began to encounter in large numbers were owned by Continental Resources (NYSE: CLR). We saw little to no flaring associated with the many Continental wells we encountered. The first substantial flare we encountered was on a site operated by ConocoPhillips (NYSE: COP):
As we drove further north, we began to see more significant flaring.
There were a lot of new wells being drilled throughout the region, and a lot of hydraulic fracturing activity taking place. As a result, we saw many water lines on the ground, and a lot of pumps owned by a company I mentioned as a pending IPO back in March in Fracking Services Are Heating Up. That company — Select Energy Services Inc (NYSE: WTTR) — incidentally saw its shares rise by 25% yesterday:
We also saw several “Poseidons” used to store water to be used for fracking:
As we traveled further north, there was a lot of activity by WPX Energy Inc (NYSE: WPX). WPX had many wells in operation, and at one site they had more than two dozen storage tanks for oil and produced water:
The most surprising observation to me was the level of activity being carried out by Marathon Oil Corporation (NYSE: MRO). In the sweet spot of the Bakken, Marathon rigs were everywhere. Here is one Marathon site, with a well being drilled by Helmerich & Payne, Inc. (NYSE: HP):
Based on my observations, it seemed that the company doing the most flaring was Hess Corp. (NYSE: HES). We observed several prominent flares at Hess sites such as this:
I will close with an anecdote. The CEO of Hess is John Hess. My traveling colleague for this Bakken tour was former NFL football player Jon Hesse (currently the Sr. VP of Business Development for my company). He tells me that since he works in oil and gas, he often has to explain that he is not “that” John Hess. Maybe John Hess can call Jon Hesse about his flares.
The Bakken is undergoing a resurgence, but the current rig count is still only a quarter of the 200 rigs that were drilling there five years ago. But demand for oilfield services is starting to heat up, so this is an area we will be looking at closely in The Energy Strategist. Consider subscribing on a trial basis to gain access to our in-depth analyses.
Signing off from Watford City, North Dakota — the heart of the Bakken.