One of the fastest-growing oil fields in the world might be hiding far more oil than previously thought, Continental Resources Inc. said Monday.
The Oklahoma City-based oil company said it successfully completed the first test well into a rock layer below the already booming Bakken Shale field in North Dakota and Montana.
“You're looking at another significant step in the development of this world-class oil field,” said Jack Stark, Continental's senior vice president of exploration. “We will be doing additional tests, but this is very encouraging.”
The Williston Basin in North Dakota and Montana contains up to five rock layers that Continental executives believe are producible.
To date, almost all of the more than 5,000 wells in the region have targeted either the uppermost Bakken Shale layer or the Three Forks 1, which lies just below.
Two wells have been drilled in the Three Forks 2, and Continental's newest well is the first to target the Three Forks 3. The Oklahoma City company plans to drill to the deepest Three Forks 4 next year.
“It's pretty exciting. You never know until you get the bit in the ground as to what you're going to ultimately find,” Stark said.
Continental said in late 2010 that the Bakken contained about 577 billion barrels of original oil in place, with 24 billion barrels of oil equivalent recoverable based on current technology.
In October, Continental raised that number by 57 percent to 903 billion barrels of total oil, based on its estimates of the lower Three Forks rocks.
Monday's announcement helps support Continental's estimates.
“From an exploration standpoint, it's very gratifying to see a lot of effort and a lot of science translate into a positive outcome here,” Stark said. “The old adage is that good fields continue to get better. That really seems to be the case with the Bakken.”
Stark said current technology should allow recovery of 3 to 5 percent of the total oil, or 27 billion to 45 billion barrels.
Continental's stock price gained $2.90, or 4.2 percent, Monday to close at $71.60 on the New York Stock Exchange.
Analyst Gail Nicholson praised the Charlotte 3-22H well's early results.
“We think this is a very positive well. It is in line or a little bit ahead of our expectations,” said Nicholson, an analyst with KLR Group in Tampa, Fla. “We still think we need to get a little more production history from the well, but if they can continue to have success and further delineate these lower benches (layers), it will add incremental value to the company as well as the entire Williston Basin.”
Continental's reserve estimates in the Bakken generally have been higher than most other evaluations.