Tappin’ the Bakken
Sidney Herald
WedneSday, oct. 30, 2013
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continental resources continues to expand in area By SuSan Minichiello Sidney Herald
With a transition for its Sidney staff into a new building last spring, Continental Resources continues to grow and maintains its status as one of the largest oil companies in the Bakken. Russ Atkins, area production manager at the field office in Sidney, remembered when there was only one person working in the office in 2004. Today, the Sidney office has 54 employees. “We’ve got to be a big oil company pretty fast,” Atkins said. The new building is clean and modern, with multiple desks and work spaces, including a large, sleek conference room. There’s even four hotel rooms in the basement for company employees who come up last minute and need a place to stay. Atkins said it can be “a little hectic” sometimes, but overall, “it’s been great fun to be with.”
oil production
In September, the average daily oil production for Continental Resources in Montana was 10,400 barrels a day. In the oil and gas industry, one bit of jargon is the acronym BOEPD, which stands for Barrel of Oil Equivalent Per Day. BOEPD is an energy unit measurement, which includes oil and gas combined. In September, the average daily BOEPD in Montana was 12,400 barrels a day. “It gives you a truer sense than just one number because some fields don’t have as much oil associated with gas production. We’re lucky in the Bakken that there’s lots of good gas associated with oil production, so it’s kind of the standard financial way to do it,” Atkins said. Continental Resources as a whole currently produces around 100,000 barrels of oil a day. “Definitely, the Bakken has the biggest share of that,” Atkins said. “As a company, two years or a year and a half ago, our goal was to triple our production in five years, and we are on track to do that as a company.” American energy independence is a top priority for Continental. According to the
U.S. Energy Administration Information, in December 2012, the U.S. produced about 7.03 million barrels of crude oil per day and imported 7.58 million barrels per day. Oil production continues to increase, and in the next few years the U.S. is projected to be the number one oil producer in the world. Atkins estimates Saudi Arabia currently produces around 9.6 million barrels a day. “It’s really changed the economy, the energy economy of the United States. If you just think about how 10 or 12 years ago, United States in the lower 48 and Alaska produced about two million barrels a day,” Atkins said. “When you think about just the geopolitical stuff, whether you agree or disagree with it, it changes if you’re not relying on those ships getting overseas with crude oil. We’re still going to have it. We’re still going to consume more than we produce. However, it lessens that dependence substantially.”
oil technology
Continental has 20 oil rigs in the Bakken, four of which are located in Montana, right along the border of North Dakota. “Everyone’s learned a lot, technology has gotten better,” Atkins said. Hydraulic fracking has undoubtedly contributed to increased oil production in the Bakken. “...we can put the sand and water in a pretty precise spot that gets the rock opened up,” he said. The Bakken is divided up into three sections: upper Bakken, middle Bakken, lower Bakken. The middle Bakken is where most of the oil is. Traditionally, oil companies would drill on the lower part and then frack up into the middle. Essentially, they would go in underneath one layer and frack up in the other. This technique was used because allowed for drilling directly into the middle Bakken. “It was always tough. It was loose, I always use the term mushy,” Atkins said. “You realize you’re 10,000 feet down and you’re going 10,000 feet sideways. And if the rock doesn’t hold together and keeps blasting on you, it’s pretty hard
to do.” When they go up further the formation would get thin, and oftentimes there wasn’t enough lower Bakken to drill into. “So now we’re just drilling right into the middle Bakken, fracking it, and having some pretty good success,” Atkins said. “Generally, we refer to that as upper Bakken shale test. It’s going to extend the play, absolutely.”
oil tranSportation
Along with many other oil companies in the Bakken, the majority of Continental Resources’ oil is now shipped to refineries by rail due to lack of pipeline infrastructure. “Most of [the oil] stays within the United States,” Atkins said. “Regardless of whether you’re moving diesel fuel or crude oil, pipelines are still the best. It’s the safest, it’s the most efficient.” Atkins acknowledges although pipelines are the safest method, oil companies have adapted to utilizing rail transportation. Regarding the Keystone XL, Continental Resources CEO Harold Hamm has said that while it’d be nice, it’s not as important as it was. “The thing you have to remember about Keystone, it wasn’t built for Bakken oil. It was built for heavy crude. So I think eventually there’s going to be other pipelines, if the Keystone doesn’t get built,” Atkins said. “The market’s too good to ignore.”
natural gaS flaring
With studies published in July citing $100 million a month of lost revenue from natural gas flaring in the Bakken, the issue remains a hot topic for Continental Resources. “It’s a high priority for our company to minimize the amount of flaring. The last number we were at was less than 10 percent as a company,” Atkins said. “There’s actually several cases where we’ll constrain the production on the oil so we don’t flare as much.” Continental Resources has previously made announcements to cap flaring at zero percent as its end goal. The company works with gas com-
SuSan MinicHiello | Sidney Herald
Continental Resources’ new building. panies such as Oklahoma-based ONEOK to build gas line infrastructure around oil wells. “There’s actually several cases where we’ll constrain the production on the oil so we don’t flare as much,” said Atkins, who pointed out that flaring was essentially “burning dollars.”
giving Back
When Atkins heard about a teacher at a Fairview school purchasing a microscope with her own money for a science project, he felt the company could help. “That’s not right. That’s a pretty easy deal that we can help with,” Atkins said. As part of the oil industry, there is an emphasis on helping math and science education. “I’m an engineer. When I see the [math and science] requirements lowered, it gets me worried. It’s a global economy. We have to compete with those cultures that really put a high value on that,” Atkins said.
Worker Shortage
Atkins said the transition from the old office to the new one is “excellent,” particularly since the old office was “getting pretty crowded.” Atkins said nearly all of the workers at the new office are from the area, either in “Sidney, Savage, or Lambert, they’re all local.” Although Continental Resources is one of the largest oil companies in the Bakken, its Sidney office is still understaffed. In Sidney, the company’s biggest needs is finding workers to fill entry-level pumper positions and foremen, the workers who oversee pumpers.
Potential employees must be able to pass a drug test and have a clean driving record. “That’s the two killer deals. You come in here and you’ve got three, four speeding tickets in the last couple years, can’t hire you. If you can’t or won’t take a drug test, can’t hire you,” Atkins said. Aside from safety reasons, insurance is also a factor in why Continental upholds those standards. Most foremen have experience as pumpers and work their way up to their position. “They put in some years, they were definitely smarter, better, quicker, and more ambitious,” Atkins said. “The trouble is, we’re going so fast, it’s hard to put that need up.” Beginning as a pumper is essential experience for anyone who wants to move up in the ranks. “It’s not just Continental, it’s everybody,” Atkins said of the oil industry’s need for workers in the Bakken. “Now hiring” signs are commonplace at the storefront windows of Sidney businesses. There is some irony in the fact that the central cause of Sidney’s infrastructure problem, big oil activity, is also short handed. “It’s all connected, absolutely,” Atkins said. Continental Resources receives several out-of-state applicant, and Atkins said he’d “gladly” hire them if they had a place to live. The company does not provide housing for its workers. A more common occurrence now is young people originally from the area coming back to work for oil companies like Continental Resources, which Atkins said is nice to see.