Changing oil technologies to be centerpiece of MADC meeting

Oil and natural gas development and the effect it has on the economy will be a major topic of discussion Tuesday at 11:30 a.m. at the Grand Hotel in Minot for “The Next Chapter: Impact and Growth,” the 2013 Board of Directors meeting for the Minot Area Development Corporation.

The featured speaker is Blu Hulsey, vice president of government and regulatory affairs for Continental Resources. The company is an Oklahoma City, Okla., based petroleum liquids producer that is currently the largest leaseholder in western North Dakota’s Bakken Formation.

“For the most part they’ve led technology in North Dakota,” said Jerry Chavez, president and CEO of MADC, about Continental Resources. “They’ve introduced horizontal drilling, they’ve introduced fracking. They’ve also introduced ECO-pad as a technology that has less impact on the landscape, has less impact on the road systems, has trucks off the county roads. So they’ve taken a very proactive approach not only to be the leader of exploration in North Dakota but also be one that’s mindful of what they can do for the environment.”

The ECO-pad he mentioned is a proprietery well drilling technology that Continental first deployed in Dunn County in 2010, according to a video introduction to the product on the company’s website.

Instead of drilling one well at each site and then dismantling the drilling rig and shipping them to the next well site on county roads to begin again, a process that takes a week away from actual productivity, the ECO-pad process allows for drilling four wells at a single site.

They do this through a drilling rig that actually “walks” on hydraulic “feet” to drill up to 14 separate wells, taking about two hours on each movement. Each surface hole is drilled first and then each is drilled to full depth, and then the horizontal drilling is done for each.

The single-location grouping of wells represents an estimated savings of 10 percent for the company and utilizes the same road system, powerlines, and product pipeline for all four wells.

“Our individual wells cost just in excess of $6 million a piece, so if you start thinking about four $6 million wells, you’re talking $24/25 million and if you can save 10 percent, which we think is realistic, you’re talking about $2.5 million in savings with each one of our ECO-pads,” said Rick Muncrief, the Senior Vice President of Operations for Continental, in an introductory video.

Things like the ECO-pad represent continued investment into North Dakota as the Bakken formation becomes ever more productive and profitable with each year.

“About five years ago we were eighth in the nation in production. Today, we’re number two, with about almost 10,000 wells. They produce somewhere in the neighborhood of 2,100 wells a year,” Chavez said. “I can remember back in maybe 2006-7, somewhere in there, when the Bakken started to take off, the industry was telling us there was probably about 96 percent unrecoverable (oil) and about 4 or 5 percent recoverable. Now that number is even higher. It’s companies like Continental that are pushing that envelope.”

Economic impact

The involvement of oil and gas production companies in the region has greatly impacted seemingly unrelated fields and has provided indicators of future paths the Minot area might take, according to Chavez.

“Five years ago there might have been one company in that industry and that was Behm Energy. Today there are upwards of 65 that are actually doing some work out in the oil patch. I think it’s safe to say that 75 percent of our businesses in our community are touched by this industry in some shape or fashion,” he said.

But, despite that large influence, Chavez said that the industry is but “one leg of a four-legged stool for us.” The sweet spot in oil production is still quite far away since the Bakken forms a bit of a “bowl” under the region, with reserves closer to the surface about 45 to 60 miles away from here.

Since people are already coming to the region, though, that ripple extends outward and Minot has things that some of the more oil-active communities do not.

“Minot’s ability to recruit that worker is very high. Some of the things we have in our hometown are very good. We’ve got shopping, good police and fire protection, we’ve got great schools, housing and apartments. So, these are the types of things people starting a new chapter in their lives gravitate to,” Chavez said.

With the commodity of oil and gas driving factors, Chavez also said that “manufacturing, for us, is on the horizon” and sees it as the industry most likely to grow in Minot.