Continental Resources Hits A Rocky Mountain High

(MoneyWatch)  Continental Resources hit a gusher today in the Rocky Mountain Region. The oil and gas explorer said its first well in the North Dakota Bakken Shale area, located in the western portion of the state, flowed at an average rate of 693 barrels of crude oil equivalent per day during its initial seven days of production.

Industry watchers note that the results were almost 50 percent more than the average production of other drilled wells in the area.

Continental is the largest leaseholder in the Bakken Shale play, with 490,000 acres in North Dakota and Montana. The majority of its acreage runs north-to-south along the crest of the Nesson Anticline in North Dakota.

Generally, the Bakken formation is drilled horizontally on 1,280-acre units to vertical depths ranging from 9,000 to 10,500 feet with opposing horizontal laterals each extending approximately 4,500 feet, for a total drilled footage of approximately 18,000 to 21,000 feet. The wells are typically fracture stimulated to maximize recovery and economic returns.

A United States Geological Survey (USGS) report on April 10, 2008, indicated that the Bakken play is the largest reservoir it has assessed in the contiguous U.S. (PDF link).

The USGS' new assessment of North Dakota and Montana Bakken Shale Play estimates that 3 billion to 4.3 billion barrels of undiscovered crude oil are commercially recoverable, using horizontal drilling and advanced fracture stimulation technologies--equal to mean resources of oil estimated to be recoverable at the ever-controversial central part of the Alaska North Slope.

In April 2008, a report issued by the state of North Dakota Department of Mineral Resources estimated that the North Dakota portion of the Bakken contained 167 billion barrels of oil-almost 63 percent of the known reserves held by Saudi Arabia!

An improved understanding of rock mechanical properties will likely lead to viable, new multiple interval stimulation technologies, refracture-candidate diagnostics, and the eventual tapping of both partially depleted wells and new access to the billions of U.S. crude reserves currently unrecoverable.

As oil climbs ever higher in price, look for the knowledge gap between recoverability and advances in drilling technology to narrow.