# 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505 - 0840 (701) 328 - 8020 (701) 328 - 8000 

# North Dakota Department of Mineral Resources Government Finance Interim Committee 12/12/2013 10:10 a.m

. Presentation by a representative of the Department of Mineral Resources of an update on the status of oil and gas development in the state. 11:10 a.m

.

http://www.state.nd.us/ndgs http://www.oilgas.nd.gov

### 5,939 unconventional wells 6,447 total Bakken/Three forks wells 10,874 total wells

### North Dakota Industrial Commission Cases Heard

0 500 1000 1500 2000 2500 3000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

### North Dakota New Well Permits Issued

0 500 1000 1500 2000 2500 3000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

### North Dakota Average Monthly Rig Count

0 50 100 150 200 250

1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015Rigs

Rig Count ND Sweet Oil Price

### • 1,100 to 2,700 wells/year = 2,000 expected

– 2014 drilling = 1,552 permits to drill approved & 736 pending approval

• 185

- 195 rigs for 9

- 12 months or

– 2015

- 2019 drilling = 1,012 orders approved for 5,247 more wells

• 3 orders for 18 wells / 1280

• 1 order for 17 wells / 640

• 2 orders for 16 wells / 1280

• 1 order for 15 wells / 1280

• 40 orders for 14 wells / 1280

• 1 order for 13 wells / 1280

• 10 orders for 12 wells / 1280

• 3 orders for 11 wells / 1280

• 21 orders for 10 wells / 1280

• 4 orders for 9 wells / 1280

• 147 orders for 8 wells / 1280

• 202 orders for 7 wells / 1280

• 97 orders for 6 wells / 1280

• 77 orders for 5 wells / 1280

• 403 orders for 4 wells / 1280

• 267 orders for approximately 2,000 increased density wells pending approval

## North Dakota Spacing Units and well pads are designed for multiple wells

8

– 20 wells per 1,280 acres proposed = 4 wells per layer X 2

– 5 layers 

### 1/2 area 

## 1/4 area 1/8 area 

# Phase 3
- Production Increased well density Phase 4 EOR? 100% area
3/4 area

# Western North Dakota

• 1,100 to 2,700 wells/year = 2,000 expected

– 185 rigs = 2,000 wells per year

– 218 rigs in May 2012 completed first phase of drilling by mid 2012

– 195 rigs will complete the second phase of drilling in 6
- 12 months

– 195 rigs will require about 20 years to complete phase 3 drilling

– 40,000 / 60,000 / 70,000 new wellsNorth Dakota Oil Production

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000197019751980198519901995200020052010201520202025203020352040204520502055Barrels per Day

History Bakken - Three Forks P10 Bakken - Three Forks P50 Bakken - Three Forks P90North Dakota Oil Price

0 50 100 150 200197019751980198519901995200020052010201520202025203020352040204520502055$ / Barrels

$/Barrel History & DOE-EIA Projected $/Barrel P50

### The future looks promising for sustained Bakken/Three Forks development BLM Hydraulic Fracturing rule could more than double permit approval time.

EPA guidance on diesel fuel in hydraulic fracturing could more than triple permit approval time. Current administration budget changes could reduce drilling capital 35
- 50% World economy stall out, restrictions on shipping by rail, or light sweet refinery capacity max
- out.