Some predict more oil exploration in South Dakota
Associated Press • April 8, 2008
RAPID CITY – Oil exploration in South Dakota has been mostly in northwest Harding County, but county Auditor Kathy Glines says she thinks it will move east.
Glines, who also is the planning and zoning coordinator for the county, said she issued 334 well permits in 2007. Already in 2008, she has issued 32 permits, mostly for new wells, the Rapid City Journal reported Tuesday.
“Here it is the first of April, and I think this is only the tip of the iceberg,” Glines said.
“I anticipate quite a bit more to come. The oil work is spreading more to the east. Its staying on the northern end of the county right now. But as the fields progress, Im going to see them a little more south than what we typically see.”
Glines keeps track of the permits that are required to dig new wells or change existing ones to accommodate new technology.
In 2007, South Dakota had 153 wells that produced 1,664,889 barrels of oil – the most since 1988.
Industry watchers wonder if a bigger boom is coming.
The largely untapped energy potential in the Bakken Oil Formation, considered by some to be a potential solution to national energy problems, has attracted national attention. It’s within the Williston Basin, which covers much of North Dakota, southeast Montana, and parts of Saskatchewan, Manitoba and northwest South Dakota.
Some think the formation has oil reserves even larger than those in the Middle East.
Fred Steece, oil and gas supervisor for the state Department of Environment and Natural Resources, said its not clear how much of the formation reaches South Dakota and whether the parts that do contain recoverable oil reserves.
“Geologically, were not fully convinced that the productive zone of the Bakken extends into South Dakota,” Steece said. “Otherwise, Im sure there would be people in here. There would be leasing and test drilling.”
Its possible South Dakota could benefit from a Bakken boom, Steece said, adding that it would not be wise to start planning on bountiful production estimates based on expansive reserves that could be difficult to extract.
“They're talking about resources, reserves, original oil in place,” Steece said. “Sure, theres a huge resource up there, but how do you get at it? Sure, you can say theres more oil up there than in the Middle East, but can you get it out of there? Its real tight shale, compared to sand in the Middle East.”
Steece said he is optimistic about the possibility of more oil being found and recovered from other formations in South Dakotas portion of the Williston and from other areas.
Almost all the operating wells in South Dakota are in Harding County, but about a dozen are in Fall River County and four are in Custer County. Also, an oil field exists near Lantry in Dewey County – far from what’s been considered the main oil area.
“Its intriguing. There is some oil over there by Lantry,” Steece said. “They produced about 100,000 barrels there over 20 years or so. Then it wasnt economic, so they plugged the wells. I think there might be some potential for somebody to go take another look at it. Ive had guys inquire almost monthly, particularly since the price of oil went up.”
Incentives, new technology and the high price of oil aided in South Dakota’s near-record production last year, Steece said. Lateral drilling means much to the expanded production in the Harding County fields, he said.
State incentives offering a break on royalty fees paid by private companies for new production on certain state lands play a role, Steece said, adding that a good market helps.
“The price of oil certainly stimulates oil and gas activity.”
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