Explosive Growth in US Oil Production: Bakken Formation Rises to Prominence

Strategic Insights -

Bakken oil shale formation in North Dakota and Montana is experiencing a surge in oil production, with estimates suggesting it could produce up to a million barrels of oil per day by 2020. Oil production in the region has increased significantly, from 3,000 barrels per day in 2005 to 225,000 in 2010, according to the Energy Information Administration (EIA). The growth trend is expected to continue, driven in part by the Obama administration's support for domestic oil production. Investors in Bakken oil plays, such as UnionTown Energy (UTOG), are watching closely as the field's potential is rapidly expanding.

Key Takeaways:

  • The Bakken oil formation is expected to produce up to a million barrels of oil per day by 2020, with estimates suggesting a significant increase from the current 225,000 barrels per day in 2010.
  • The growth trend is driven by the Obama administration's support for domestic oil production and the EIA's predictions that the field will produce 350,000 barrels per day by 2035.
  • UnionTown Energy (UTOG), a Montana-based junior oil company, is making a name for itself with its focus on the massive oil reserves trapped in the Heath formation, an oil shale field neighboring the Bakken.
  • The company's share price has increased by almost 200% since March 14, 2011, and it has acquired a property known as the Musselshell, which has an estimated recoverable oil reserve of 10.4 million barrels.
  • The Bakken formation is estimated to hold 3.65 billion barrels of oil reserves, making it the largest oil find in U.S. history next to the oil fields in Alaska.

Statistics:

  • The Bakken oil formation's oil production has increased from 3,000 barrels per day in 2005 to 225,000 barrels per day in 2010.
  • The EIA estimates that the field will produce 350,000 barrels per day by 2035.
  • UnionTown Energy's share price increased by 196% from $0.87 on March 14, 2011, to $2.60 on March 24, 2011.
  • The Bakken formation is estimated to hold 3.65 billion barrels of oil reserves.

Sources:

  • StockMarketLife.com: "Energy Update: Bakken Could Produce A Million Barrels of Oil a Day by 2020"
  • Energy Information Administration (EIA)
  • Continental Resources: Statement from Harold Hamm, President