The Bakken Shale continues to see a high level of drilling activity from the exploration and production sector, as operators stake claim to this prolific unconventional resource play that has been unlocked with horizontal drilling and fracturing.

All this activity in the Bakken and other formations has propelled North Dakota production to levels that were not thought possible just two years ago. Oil production in March 2010 was approximately 277,000 barrels per day, almost twice the previous monthly oil production peak achieved in the mid-1980s.

Recent Reports
The most recent report from the Bakken comes from Whiting Petroleum, which reported the completion of six recent wells drilled to the Bakken. The six wells averaged production of 2,682 barrels of oil equivalent  (BOE) per day during a 24-hour test period, with one of the wells as high as 3,445 BOE per day.

The Whiting Petroleum well was nothing compared to the latest from Brigham Exploration (Nasdaq: which has approximately 305,000 net acres exposed to the play. The company reported a recent well completion that produced at 5,035 BOE per day at its Ross Project area in North Dakota.

Continental Resources  is one of the more active drillers in the Bakken area. The company produced an average of 15,000 BOE per day in the first quarter of 2010 from its acreage in North Dakota and Montana.

Continental Resources has drilled 38 wells here so far, and the company felt comfortable enough with the production curve on these wells to raise the estimated ultimate recovery  (EUR) to 518,000 BOE from the previous 430,000 BOE. 

Even this new EUR may understate the potential of wells here. Another well from Whiting Petroleum that was completed in June 2008 has already produced 575,000 BOE since it was put onto sales. The well is still pumping out more than 750 BOE per day after two years of production.

All this production requires infrastructure  to bring the oil to market, and Enbridge is building pipelines in the United States and Canada, as the play crosses the border into Saskatchewan as well. 

In January, the company placed into service an expansion of its pipeline in North Dakota. This added 51,000 barrels per day of capacity, boosting the total to 161,000 barrels per day. Enbridge is considering an additional expansion that will add another 115,000 barrels per day to capacity on the American side.

Enbridge is also constructing an expansion of its Saskatchewan pipeline, which will add 129,000 barrels per day to capacity on the Canadian side.

Bottom Line
The Bakken keeps on giving, as exploration and production companies rush to develop this huge trove of oil located in a part of the United States that most thought mature and unworthy of attention.

Source: Investopedia

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