The U.S. Geological Survey on Tuesday nearly tripled its estimate of recoverable oil and natural gas in the Bakken Formation of North Dakota and Montana.
While the gain makes the Bakken the fastest-growing oil field in the world, the new numbers are still lower than Oklahoma City-based Continental Resources' estimates.
The government now says the Bakken likely holds about 7.4 billion barrels of undiscovered oil that can be recovered with today's technology. The number does not include the amount of oil companies have proved is in the ground.
The revised report also estimates 6.7 trillion cubic feet of undiscovered, technically recoverable natural gas and about 530 million barrels of natural gas liquids.
“These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation's dependence on foreign sources of oil,” Interior Secretary Sally Jewell said in a statement Tuesday. “We must develop our domestic energy resources armed with the best available science, and this unbiased, objective information will help private, nonprofit and government decision-makers at all levels make informed decisions about the responsible development of these resources.”
The new oil number is 49 times more than the geological survey's 1995 forecast of 151 million barrels of recoverable oil. By 2008, the geological survey revised its estimate to 3.7 billion barrels.
The geological survey attributed much of its most recent increase to efforts by Continental Resources and other producers to recover oil from the Three Forks Formation, which lies beneath the Bakken in the Williston Basin of North Dakota and Montana.
“Since the 2008 USGS assessment, more than 4,000 wells have been drilled in the Williston Basin, providing updated subsurface geologic data,” the government said in a statement. “Previously, very little data existed on the Three Forks Formation and it was generally thought to be unproductive. However, new drilling resulted in a new understanding of the reservoir and its resource potential.”
Continental Resources was one of the first developers in the area and now has a stake in about 20 percent of the wells drilled so far. The company has led the effort to develop the deeper rock layers in the area.
Continental CEO Harold Hamm said he still thinks the government estimates are too low, but that he is pleased with the revision.
“The USGS generally is very conservative in their estimates,” Hamm said. “This is a big step. We're encouraged by it.”
Continental Resources in 2010 estimated the field contains 24 billion barrels of technically recoverable oil out of 577 billion barrels of total oil in place.
Last year, the company bumped up its total oil estimate by 56 percent to 903 billion barrels, but it has not yet revised its recoverable estimates.
Continental Resources and other producers in the area are now producing oil from four different rock layers and continue to improve drilling techniques in the area.
“We've always said these resource plays will only get bigger with additional drilling,” said Rick Bott, Continental's president and chief operating officer. “The USGS assessment is proving that out. The play is getting much bigger.”
Production estimates tend to grow both because of additional information provided by each well and because of improved technology.
“This assessment is just based on current technology employed today,” Hamm said. “We feel like in the future the recovery will go up as technology improves and as we try different recovery techniques.”