About seven years ago, oil companies figured out how to use horizontal drilling and hydraulic fracturing to extract unconventional oil resources trapped in a geological formation called the Bakken, which was previously believed to be too difficult to tap. With petroleum prices fetching record prices over the past year and a half, an old-fashioned oil rush is on.
So what is this Bakken Formation? And what makes it different from conventional oil finds?
“Typically in an unconventional place [like the Bakken] you’re dealing directly with the primary source rock, the kitchen sink itself where the oil is generated. It hasn’t really migrated to a typical reservoir, which captures it and allows more of a cooking process.”
As a result, the oil isn’t sitting in a pool or even in a relatively concentrated place. It’s still trapped in the source rock, the place of its genesis. This source rock isn’t porous, and as a result the oil doesn’t flow easily. Saleri says, “So essentially you remedy that deficiency by putting in a lot more wells.”
That also means combining hydraulic fracturing and horizontal drilling, similar to the technique of drilling for shale gas in places like the Marcellus. The average well doesn’t produce much, especially after the first couple of years. In October last year, RBC Capital Markets said there were about 5,700 wells in North Dakota and forecast that there would be around 2,000 more by October this year.
So this oil has been hiding in plain sight, but oil companies needed to figure out how to get at it.