About a month ago, I wrote about a bona fide black gold rush going on in North Dakota.
I told you how workers have been sleeping in tents and cars because of the housing shortage the booming oil industry created.
The unemployment rate is the lowest in the nation; only the surrounding suburbs of Washington, D.C., come close to NoDak’s near full employment.
Cadillac, Mercedes, and BMW dealerships can’t keep cars on the lot...
Exactly a month ago, I said: “It seems like new oilfields are being discovered almost every year in NoDak.”
It’s true. Since 2008, the Bakken, Three Forks, and Spearfish formations have experienced a renaissance of activity.
Guess what?
Since the publication of my article, another, new oil formation is getting a lot of attention: the Tyler formation.
Well, it's not actually "new." None of these formations are really new.
What is new are the flow rates… and the method of drilling.
Horizontal fracking is opening up a flood of oil and natural gas that’s been stuck in shale for millennia.
(Please note: This doesn’t change Peak Oil ;).)
According to recent reports, NoDak state officials say the oil formation in Southwestern North Dakota believed to be similar to the Bakken shale formation is getting a lot of interest.
Department of Mineral Resources geologist Stephan Nordeng says the Tyler Formation above the Bakken encompasses nearly all of Western and Southwestern North Dakota and extends into South Dakota.
State Mineral Resources Director Lynn Helms — who now has celebrity status within the oil industry — says the Tyler Formation is most likely one-third to one-half the size of the Bakken in terms of coverage area and oil reserves:
What we’re just beginning to recognize is that the entire Tyler package is another unconventional play like the Bakken. It contains several really hot shale beds, and when you get a high gamma ray signature in those shale beds, it means there’s lots of organic material in there.
In order to reach the Bakken, oil companies must drill through the Tyler Formation...
“Instead of having just three basic layers like the Bakken does, it has little sand bodies that come and go — the shales aren’t stacked as neatly as in the Bakken, so from that standpoint, it’s more complicated in attempting to understand what’s going on with it,” Nordeng explained.
He points out that the formation has the potential to produce natural gas, but it is unknown how many barrels of recoverable oil are in the Tyler. (The whisper number is 2 billion barrels.)
More than 100 oil wells have been drilled in the Tyler Formation, producing about 200 million barrels of oil to date.
Shallower than the Bakken, the Tyler is composed of a similar source rock.
According to Nordeng, “The source and the reservoir could be the same; that’s one of the exciting parts of all of this, is that the rocks that we used to look at and wish we could do something with we can now.”
Helms said no horizontal wells have been drilled in the Tyler; only vertical.
“There’s a lot of excitement about the fact it goes into South Dakota, and there’s also been already some leasing going on south of Dickinson and east of Dickinson,” Helms said.
The methods of recovering oil in the Tyler Formation — one Helms cites as having “all the marks of an unconventional resource play” — could be a “whole new ballgame.”
There are a lot of new ballgames being played...
Horizontal fracking is now in Europe, where Poland has the potential to be the next natural gas giant — revenge it would love to serve against ancient foe Russia, the number one supplier of natural gas to the continent.
And the Chinese want to frack, too. Last month, they went to Texas, where hydraulic fracturing was mastered.
On October 11, the government-run China National Offshore Oil Corp. agreed to pay $2.2 billion for oil and gas properties in South Texas in the Eagle Ford shale formation, marking China's first successful energy investment in the American energy market.
Fracking is spreading around the globe like a flu pandemic.
And it will likely remain that way for a very long time.
We’ve already handed investors a mint recommending some ground floor shale plays.
And we’re about to do it again with a company that just came public in August...
Their fracking technology is a game-changer.
Stay tuned,
Brian
Publisher, Wealth Daily
