Oklahoma City oilman Harold Hamm still thinks the number is far too low.
The government now says the world’s fastest-growing oilfield likely holds about 7.4 billion barrels of undiscovered oil that can be recovered with today’s technology.
The number is 49 times more than its 1995 forecast of 151 million barrels of recoverable oil. By 2008 the geological survey revised its estimate to 3.7 million barrels.
Oklahoma City-based Continental Resources Inc. was one of the first developers in the area and now has a hand in about 20 percent of the wells drilled so far.
Continental Resources in 2010 estimated the field contains 24 billion barrels of technically recoverable oil out of 577 billion barrels of total oil in place.
Last year, the company bumped up its total oil estimate by 56 percent to 903 billion barrels.
Continental Resources and other producers in the area are now producing oil from at four different rock layers and continue to improve drilling techniques in the area.
“The Bakken continues to get bigger, as large fields around the world have always done,” Rick Bott, Continental’s president and chief operating officer, said at the company’s investors day in October.
Oklahoma State University held its 7th Annual Energy Conference on Tuesday in Oklahoma City, and our man Jay F. Marks (@okenergybeat) was a tweeting machine. You can read his dispatches below and check out Energy Editor Adam Wilmoth’s recap of the conference here. For the speaker presentations, go here.
Outgoing Chesapeake Energy Corp. CEO Aubrey McClendon is no longer a billionaire, according to the latest Forbes list of the wealthiest people on the planet.
The magazine points out that McClendon was forced to sell nearly all his Chesapeake shares in a 2008 margin call.
Chesapeake announced last month that McClendon will leave the company he founded on April 1 with a severance package worth about $47 million.
McClendon is falling off the list as it has been revealed that he’s leveraged against his personally held oil and gas interests in the same way he did with Chesapeake leading up to 2008. Put another way, the guy has mounds of debt,” Forbes reported.
Five Oklahoma families remain on the list this year, led by Continental Resources Inc. CEO Harold Hamm, who ranked No. 90 overall with a net worth of $11.3 billion.
Hamm was followed by Tulsa oilman and Bank of Oklahoma Chairman George Kaiser at $10 billion and ranked No. 109 overall.
Hobby Lobby founder David Green is listed at No. 276 with an estimated net worth of $4.5 billion.
Oklahoma retailers Tom and Judy Love tied with Lynn Schusterman — widow of Samson Resources’ Charles Schusterman — to round out the state’s presence on the list at No. 384 with a net worth of $3.5 billion.
SandRidge Energy Inc. CEO Tom Ward on Friday discussed the possibility of a joint venture in the Mississippi Lime in 2014 or 2015.
During a conference call with analysts, Ward said the Oklahoma City energy company is fully funded through 2014, but that the executives already are working to secure financing to support its drilling budget for 2015 and beyond.
The booming Mississippi Lime oil and natural gas field covers much of northern Oklahoma and western Kansas.
Without naming names, Ward said he expected SandRidge to claim a higher price for its joint venture than other parties in the play.
Ward’s former company, Chesapeake Energy Corp., was widely criticized on Wall Street this week when it announced a $1.02 billion Mississippi Lime joint venture that translates into $2,400 an acre, far less than the $7,000 to $8,000 an acre Chesapeake previously said it expected to receive.
Ward did not address Chesapeake specifically, but he said SandRidge is positioned to command one of the highest rates in the Mississippi Lime.
Ward pointed out that SandRidge has spent more than $450 million on pipeline, electrical and saltwater disposal infrastructure in the area over the past two years.
It requires you to have infrastructure, so if other parties don’t have the infrastructure that we have, obviously, that’s worth something,” he said.
Drilling costs also are a factor, Ward said.
We average about $1.1 million per well less than the average of our peers,” Ward said. “We will save over $300 million this year net to SandRidge just from the average of our peers in drilling wells.”
Ultimately, land — and even the oil and natural gas beneath it — is only one small part of the price operators can command for their producing acreage, Ward said.
When you’re selling acreage, you’re really not selling acreage, you’re selling an enterprise,” he said. “You’re selling the ability for a joint venture partner to come and work with us for decades.”
I wrote in Friday’s paper about how new and expanded pipeline projects over the next two years are expected to move more oil to the Gulf Coast and alleviate the backlog at Cushing.
An article in the Calgary Herald on Friday explains how another pipeline conversion project could further help move oil more freely throughout the country.
Calgary-based Enbridge Inc. and Houston-based Energy Transfer Partners plan to spend up to $3.4 billion over the next two years to convert an existing natural gas pipeline to transport crude oil from Patoka, Ill., to the St. James hub in Louisiana.
When completed, the line is expected to transport 420,000 to 660,000 barrels of oil per day.
Oklahoma City-based Continental Resources Inc. and other producers in the Bakken Shale in North Dakota and Montana could be among the biggest beneficiaries from the proposed line.
Continental transports most of its Bakken crude by train to refineries on the east and west coasts.
NASA last week released new satellite images of the earth at night.
The updated, high-resolution pictures show far more detail of what NASA calls the black marble, or the earth at night. The images are a compilation of satellite photos taken in April and October.
I get geeked out about looking at cities and patterns, including stark contrasts east and west of I-35 on the U.S. map and of how dark places like Africa, Australia and North Korea are on the global map.
I am especially struck by how visible the oil and gas drilling activity is throughout the United States. Offshore production platforms dot the Gulf of Mexico, especially near New Orleans.
The brightest oil patch on the map is the Bakken in North Dakota and Montana. The huge field stands out bright against the relatively dark northern plains.
Oklahoma City-based Continental Resources Inc. is the largest player in the field, which is one of the fastest-growing in the world.
Continental Resources Inc. founder and CEO Harold Hamm is expected to testify Thursday morning before a House subcommittee in Washington, D.C.
Hamm plans to talk about the potential for North American energy independence, opening up federal lands to oil and gas drilling and the importance of tax credits for the oil and gas industry, according to his prepared testimony.
I am excited about our energy future and therefore our economic future. But I am equally concerned about federal policies that could cost us that future.
Just a few years ago, America was importing 60 percent of its oil. But with technological advances in horizontal drilling over the last 15 years, we now import less than 45 percent of our oil. Just a few years ago we estimated our nation’s natural gas reserves at seven years. We now have natural gas reserves of over a century. With this extraordinary advance in technology we can now access the immobile oil and natural gas of the world. Previously to this point we were only able to produce the world’s mobile oil and natural gas. There is about 1/3 more immobile oil and natural gas than the mobile oil and gas we have produced for over a century. The technology that allows us to drill two miles down, turn right, go another two miles and hit a target the size of a lapel pin has unlocked the resources that make energy independence a reality.
This paradigm shift in American oil and gas exploration brings with it high-paying jobs, increased tax revenues and economic growth, while lessening our dependence on foreign oil.
Hamm also serves as the head of energy advisory committee for GOP presidential candidate Mitt Romney, whose energy plan touches on similar subjects as Hamm’s prepared remarks. But Hamm emphasizes in his testimony he’s there as a private citizen:
But I am not here representing Continental Resources, any political campaign or political party. I am here as an American patriot that loves my country and a person that is grateful for the opportunities I have been given by being an American. Only in America can the thirteenth child of a sharecropper turn a one-man, one-pump-truck operation into one of the nation’s largest oil companies.
Meanwhile, the folks at the Think Progress environmental blog have several hypothetical questions for Hamm ahead of his testimony. They are skeptical of the claims of energy independence and want more details on which federal lands might be opened for oil and gas exploration.
In his hearing testimony, Hamm supports opening federal lands and offshore areas for drilling, but claims it “would impact my company very little” because “we mainly work on private lands.” But Hamm holds a number of permits to drill on public lands, including recent permits for Montana and North Dakota. Romney’s plan would likely boost Hamm’s profits, but potentially at the risk of Americans’ national parks.
Host Jim Cramer pointed out that while the company’s earnings missed expectations last week, production was up sharply, topping 100,000 barrels per day.
It’s beyond our imagination for sure,” Hamm said. “Those numbers have come pretty quickly. We should see more expansion coming from here.”
One of the biggest factors holding back growth in the Bakken formation of North Dakota is the limited pipeline infrastructure in the area, Hamm said.
The Bakken is the largest oilfield in the world that doesn’t have a primary pipeline serving it. That puts us at a severe disadvantage,” he said.
Hamm has been a strong supporter of North American energy independence, saying the country should invest its money on oil and natural gas production in North Dakota, Oklahoma and other parts of the country instead of in the Middle East.
Cramer asked if North America could produce all its own energy within five years.
We’re getting close to that,” Hamm said. “I have said that within 10 years, North America could be energy independent. In five years, I don’t think we’ll be using a whole lot of Mideast oil if we don’t want to, and we will be more secure.”
Continental Resources Inc. CEO Harold Hamm continues to talk about his vision for North American energy independence.
Hamm appeared Tuesday on CNBC to tout a recent Harris Poll indicating nine out of 10 Americans believe the United States should strive for energy independence.
He said domestic oil production is booming thanks to developments in precision horizontal drilling technology that allows producers to target large reserves of immobile oil.
“We’re talking about North American energy independence in the next 10 years.”
Hamm said continued drilling has allowed producers to boost oil production.
“You have to go out there and poke holes in the ground. We do that every day.”
Hamm said the lack of major U.S. oil plays will prevent producers from creating a glut like the one that has caused natural gas prices to plummet, but he maintained the industry needs continued “tax provisions” favorable to exploration.
“It allows us to go out and fail. And fail again. It was necessary that we did that with the Bakken. Some 18 wells were drilled before it was commercial up there. It’s necessary that we have a tax consequence that will allow us to do that.”
Hamm said the U.S. should work with its neighbors to continue increasing oil production.
He welcomed news that Mexico’s new president may allow private investment in that country’s oil industry for the first time since 1936, while contending the fight over the transcontinental Keystone XL pipeline has not permanently soured the U.S.’s relationship with Canada. which already is a major oil producer.
Thurman Thomas is a Texas native who achieved his greatest fame in western New York, where he helped lead the Buffalo Bills to four straight Super Bowls in the 1990s.
But now Thomas is looking to return to his roots.
The NFL Hall of Famer tweeted Tuesday that he missses Oklahoma and would like to return. He’s angling for a job with a state energy company.
“I will miss #Oklahoma. I would move back here, but I need a job. Can someone make that happen? Continental Resources, Devon Energy, etc…”
Thomas, who starred at Oklahoma State University in the mid-1980s, started his own energy company after he retired from the NFL.
“Energy and energy savings has become a hot topic; whether you are talking about gasoline, electric, natural gas, or renewable energies, it is something everyone is talking about and concerned with these days,” Thomas said in a Q&A earlier this month with Green Real Estate Daily.
Thomas credited billionaire Oklahoma State alumnus T. Boone Pickens with spurring his interest in energy in that interview.
Maybe another OSU alum can help Thomas find a job that will bring him back to Oklahoma.
UPDATED: Thomas says he is not in a big hurry to return to Oklahoma since his daughter wants to graduate from high school in Buffalo.
“Just trying to get the ball rolling early,” he told The Oklahoman in a direct message on Twitter.