COLUMN-USGS estimate for Bakken oil remains conservative: Kemp
By John Kemp
LONDON May 1 (Reuters) - The Williston Basin underneath North Dakota, Montana and South Dakota contains twice as much crude and three times more gas than previously thought, according to an updated assessment published by the U.S. Geological Survey (USGS) on Tuesday.
USGS assesses that at least 7 billion barrels of oil, and 6.4 billion cubic feet of natural gas, could ultimately be recovered from the two formations, with at least a 50 percent probability.
That is up from 3.6 billion barrels and 1.7 billion cubic feet at the time of its last assessment published in 2008.
The increases are smaller than some market participants anticipated, and remain far more conservative than estimates by some of the companies drilling in the area.
But USGS estimates are generally and deliberately conservative. Historically, the amount of oil ultimately recovered has exceeded them in many cases, as technology improves and more becomes known about remote parts of the formations. So there may be scope for even more crude and gas to be produced.
USGS made only minor revisions to its estimate of the undiscovered but technically recoverable resources (UTRR) of oil contained in the basin's Bakken formation. But it boosted its estimates for associated gas. More importantly, it thinks there is at least as much oil and gas that can be recovered from a lower layer of rocks known as the Three Forks formation that was not included in the last assessment published in 2008.
The Bakken formation is actually three layers of rock. Upper and lower layers of thick black marine shale which have a total organic content varying from 1 percent to as much as 35 percent, and a middle layer of sandstone, siltstone, mudstone and dolomite. Continued...