As Continental Resources brings more of its Williston Basin wells back on line, it was surprised to learn that production had sharply increased in Montana after two months of wells being shut in, reported Oil Patch Hotline.

“We turned it back on and the production was double of what it was before we shut it in,” said CEO William Berry. The company said it would bring most of the curtailed Bakken wells back on line by the end of this month. Continental led the early exploration of the Elm Coulee Field in eastern Montana in 2008 and now holds leases on 1.1 million acres there.

“This is a very low permeability reservoir, and you give it time to shut-in, you start seeing it— the reservoir basically recharged the stimulated rock volume area we’ve got around the wells” said President Jack Stark. “And so the fact is, there’s a lot of oil out here.”

Stark and other industry representatives say they expect North Dakota oil production is expected to return to record levels this summer, but they say the resurgence will be slow and steady.

Technology advancements are driving the increase in activity rather than the price of oil, Jack Stark is reported as saying in the Bismarck Tribune.

“This year, there’s no doubt that the Bakken is performing better than ever,” he said. “The rock hasn’t changed. It’s all happened through technology.”

Continental, North Dakota’s top oil producer, only recovered about 3 to 5 percent of the oil early in its Bakken operations. Now, said Stark the company recovers 15 to 20 percent of the oil, with efforts underway to continue increasing that.

As the re-charging of Montana wells indicate, “We’re leaving a lot down there,” said Thomas Nusz, chairman and CEO of Oasis Petroleum.

Erec Isaacson, vice president of Rockies Business Unit for ConocoPhillips, said $65 oil is the new $100 oil, thanks to innovations the industry developed during the downturn.

From the Oil Patch Hotline

Harold Hamm, CEO of Continental Resources, the largest Williston Basin producer, said OPEC and U.S. shale producers should cut crude oil production and shipments into an oversupplied market.

U.S. shale producers “need to row our own boat… We need to make sure we don’t oversupply the market,” Hamm told a Denver conference recently. “Capital discipline is more important now than at any time I’ve seen.”

Producers need to cut back on the number of active drilling rigs, noting that reductions so far “haven’t bottomed yet,” Hamm said. He believes that the current rig count of 909 will drop to 800.

“You did that.”

“We need to talk about it more,” said Blu Hulsey, Senior Vice President of Government Relations and Regulatory Affairs at Continental Resources. The accomplishments and technological development of the petroleum industry goes far too much unremarked upon, Hulsey told the audience at the Montana Petroleum Association’s Appreciation Luncheon at the DoubleTree in Billings, on August 28.

The technology that has been developed within the industry “is equal to the technology of putting people on the moon,” he said,

Continental Resources is one of the largest oil producers in the Bakken.

“We are the greatest oil country in the world,” Hulsey unequivocally stated at one point.

The accomplishments of the industry “has changed the world,” said Hulsey, pointing to the recent antics of Iran capturing oil tankers and threatening other countries militarily “…and the price of gas in Billings doesn’t go up a penny,” he exclaimed. In the past, with the US dependent upon the Middle East for oil, any kind of incident like those recently witnessed, would have caused oil prices to sky rocket, but not anymore.

“You did that,” he told the room packed with representatives of all aspects of the petroleum industry. The US petroleum industry is now the world’s largest producer of oil and an exporter of oil and gas to the rest of the world.

As the cost of production continues to decline because of the new technology, and the level of production continues to increase there will continue to be a lot of changes to the world and to the industry itself.

The industry is changing how it looks at itself. “Everyone is looking internally,” he said about petroleum businesses.

You don’t need 150 rigs in the Bakken, 60 will produce just as much, now.

Returns that were projected on $70 per barrel oil prices are now being experienced with $50 per barrel oil prices. 

“We have almost doubled production in four years because of technology,” said Hulsey.

At one point it was impressive that there were 12 wells in the Bakken that hit 100,000 barrels of production in the first 90 days. Now there are 157 wells that hit that level of production in 90 days, and more and more continue to hit that goal.

“You are going to see long-term growth in the Bakken,” predicted Hulsey, “and we are going to continue to get more recovery.”

Investors are not being apprised of this reality as much as they should be, Hulsey lamented.

Hulsey praised the people in the industry. When the industry encounters barriers, “our people get better – American ingenuity is making a difference.”

Hulsey talked about the Bakken as a world class resource, saying that 150 miles wide and 150 miles long, it is comparable to the Permian Basin, which while impressive and larger doesn’t have the same quality of oil. There is more water in the Permian oil. Having considerably less water reduces production costs in the Bakken. Efficiencies being achieved in the Bakken are not necessarily found in every oil field – many won’t be found in the Permian.

The Bakken will eventually produce 30 to 40 billion barrels of oil.

Hulsey lauded the Trump administration. “We have an administration that is not stopping us from doing long-term development…that means big improvements for the long term.”