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Mini Bakken….in Our Backyard

Laura McRae

About Laura McRae

Laura McRae has written 66 post in this blog.

28 Year Veteran of the Financial Services Industry, 12 Year Volunteer Business Mentor for SCORE (Service Corps of Retired Executives), BA History & Political Science - Montana State University Bozeman, MBA University of Phoenix

While Williston, North Dakota is the epicenter of the Bakken oil play, talk of the “mini Bakken” is beginning to take root in eastern Montana…an area that is sparse in population, sparse in trees, but even more importantly sparse in infrastructure to support the momentum of an energy wave.

Like most decisions in life, the choices we make  can be a double edged sword.  On the one hand, an oil boom can spell immense economic opportunity; on the other hand it can completely mow over a community, a culture, and a way of life.  With the advent of technological advances in the recovery of unconventional oil & gas formations, Williston was transformed from a quiet farm town into 24/7/365  dynamic commerce and chaos… and the black oil rush is on !

Central Montanan’s “mini Bakken” which ranges from the base of the Snowy Mountains west of Lewistown to Jordan, MT in Garfield County, appears to be home to yet another played-out oil field brought to technological life.  For half a century, geologists have known that the Heath Formation (250 miles wide from east to west and 150 miles wide from north to south) held oil and natural gas formed from tropical forests and swamps about 320 million years ago, during the Mississippian period of the Paleozoic Era.  At that point in prehistory, North America and Eurasia were one and the Great Plains lay under seawater.

As early as February of 1920, the Heath Formation was tapped with a discovery well in the Cat Creek area of Petroleum County.  At it’s peak, the Cat Creek area supported 150 wells and estimated production ranges from 23 to 35  million barrels of oil depending upon the source of information. The latest productive oil reached the surface in 1990, at which point the inability to economically harvest the remaining oil trapped in the minerals left the Heath abandoned and forgotten.  Until now…enter the modern oil man.  Equipped with the latest in horizontal drilling and hydraulic fracturing technology and a once forgotten area is rediscovered.

Six companies have since bored into Heath shale with vertical wells; collecting core samples in order to determine if the formation is significant enough to support the application of current drilling technology.  The average cost of a well using this techonology in the Bakken ranges from $7 to $9 million and while success rates range @ 95%, this type of drilling is an extremely expensive proposition.  It is known that the Heath oil shale formation is the source for the Tyler Sandstone; what isn’t know is whether or not horizontal / fracturing technology will work in this part of Montana.  Geologist studies reveal the Heath can range from 10 feet thick to 40 feet thick and shale depths vary from 2,000 to 5,000 feet.

The landmen began showing up 18 months ago in Garfield County (Jordan) to determine ownership in mineral rights.  In Winnett, the county seat for Petroleum County there are at least five landmen in the records vault daily.  In spite of increased activity, no one is saying much.  Competition is every where….speculation is everywhere.

San Antonio, TX based, Central Montana Resources LLC (CMR) operates out of an office in downtown Billings.  This private oil & gas company holds the lease on mineral rights in six central Montana counties and has partnered with major players such as Endeavor.  CMR has been on the ground in Montana for much of the past five years and in 2010, CMR announced a $47 million investor infusion to further its Heath formation exploration.  The base in the Heath is anchored north of Roundup where the company is building a warehouse and pipeyard.  While CMR is very much in the exploration phase, was wells begin to produce exploration will end and commercialization will start overnight.

 

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3 Responses to Mini Bakken….in Our Backyard

  1. Hi there. Your article about the “mini Bakken” interested me. My sister and I have approx. 680 acres of mineral rights in Garfield County, MT. 16N-40E and a quarter section in Teton County, 25N-3W. There are 3 inactive wells on or around the Garfield holdings drilled by Gulf Oil before they had their problems. Not sure what inactive means. Do they mean they quit on it or it was a dry hole? At any rate it may have been before the new technology. Would love to lease either parcel and have a lot of feelers out. Not sure what the going rate is.

    Brenda Segna

    • Bud – thank you for your comment & your interest in Synergy Station !

      One of the best sites we’ve found dealing with the subject of mineral rights is http://www.mineralweb.com. This is an extremely robust site and is owned and managed by Kenny DuBose. We just replayed a creative commons licensed piece he produced on his site called “Maximizing Your Minerals”. It is a free download when you subscribe to his newsletter which is also free. Also – look under FAQ’s – one of the questions answered has to do with nonactive leases. I encourage you to visitng Kenny’s site and also to visit another site; http://www.mineralrightsforum.com. This site also is subject matter rich and it has active forums on mineral right topics. I noticed today that there were threads started about mineral rights in Montana as well. A regional law firm based out of Billings, MT, Crowley Fleck, has a complete oil and gas division. If you have specific questions, I encourage you to reach out to them. They are a very old, estalbished law firm with deep roots in Montana and North Dakota. The North Dakota Petroleum Council also has a mineral rights section that is fairly informative. Their site is http://www.ndoil.org, look under “Royalty Owner Info Center” and “Surface Owner Info Center”.

      Thank you for you interest in Synergy Station. If there is any additional content you would like to see on the site feel free to email me personally. Laura

  2. Gordon Garrett

    Thank you so much Laura. I subscribe to mineral rights forum and find it interesting and useful. I’ll try the others. The last time my Garfield rights were leased was in 1971 by Transcontinent. A lot has happened since then. The whole subject is interesting. And, as my wife keeps saying “God helps those who help themselves”. I just think it’s prudent to try to stay informed. For some reason I hadn’t looked for a reply to my post and found it by googling. I live in Oregon, but I’m the only one in my family that wasn’t born in MT. I checked the Teton county and Garfield county records on a trip this last summer.




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