News

It's coming; $2 billion investment, 200 wells, pipeline heading to Bowman County




By BRYCE MARTIN Pioneer Editor

 

Questions of oil heading to Bowman finally have been answered with a resounding “yes.”

 

A $2 billion investment is expected by Denbury Resources Inc. in Bowman County for infrastructure. The drilling of 200 oil wells is expected to enhance production in oil fields within the area.

 

Denbury earlier this year purchased producing property interests in the Cedar Creek anticline of Montana and North Dakota from ConocoPhillips for $1.05 billion. That includes the Bowman area oil fields that were held by ConocoPhillips and Burlington Resources.

 

Denbury has a carbon dioxide (CO2) pipeline running through Wyoming to Baker, Mont. and it plans to stretch that pipeline from Baker to Bowman, giving a timeline between 2016 and 2018.

 

Denbury’s CO2 cycle captures CO2 and transports it to mature oil fields to increase production. All total, Denbury estimates a CO2 flood of its Cedar Creek assets could recover 260-280 million bbl of oil.

 

he fields are to the south and west of Bowman, making up a portion of the Red River Formation. The Cedar Creek anticline, which runs through southwestern Bowman County, extends 126 miles in a northwest-southeast direction and ranges from 2-6 miles in width. The structure contains a collection of oil fields. Commercial quantities of oil were discovered in the early 1950s and original oil in place at all fields, including those not owned by Denbury, is estimated at over 3 billion bbl.

 

The anticline produces from numerous reservoirs with the primary reservoir being the Red River formation.

 

While the possibility of becoming the next Williston or Watford City are slim, the city of Bowman isn’t taking any chances in ensuring it’s prepared.

 

City of Bowman Mayor Lyn James spoke with North Dakota Department of Mineral Resources Director Lynn Helms, asking him to clarify certain things she heard through various media outlets about oil wells heading to the area.

 

James sits on several state boards including the committee established to make recommendations regarding policies, procedures and distributions of 65 percent of the Oil and Gas Impact Fund and talks a great deal with oil corporations, but not directly related to oil coming to Bowman.

 

Denbury is an independent oil and gas company. It is the largest oil and natural gas producer in both Mississippi and Montana, owns the largest reserves of carbon dioxide used for tertiary oil recovery and holds significant operating acreage in the Rocky Mountain and Gulf Coast regions.

 

The company said its goal is to increase the value of acquired properties through a combination of exploitation, drilling and proven engineering extraction practices, with its most significant emphasis on CO2 tertiary recovery operations.

 

“I don’t expect it to be like Watford City,” James said.

 

A comprehensive plan was established and adopted to help the city grow in an orderly fashion, to avoid what happened in the Bakken oil boom cities of northwest North Dakota.

 

With a North Dakota State University study suggesting the current population estimate for Bowman County was 3,174 and would nearly double to a maximum of 5,589 with oil development, the pressure is on to ensure growth is handled correctly.

 

“We’ll see growth,” James said.

 

At more than 200 pages, the Bowman Comprehensive and Transportation Plan was prepared by SRF Consulting Group Inc. and also is referred to as the Land Use Plan.

 

Cindy Gray of SRF Consulting said the plan is just a starting point and it is not written in stone; it can be amended at any time.

 

“This plan is just a tool, just a suggestion of what we could do with the land to grow more orderly,” Gray said.

 

A comprehensive plan is not optional for communities that wish to exercise zoning authority, the plan stated. North Dakota communities are required to adopt a comprehensive plan as the foundation document for their zoning and subdivision regulations. The plan provides a roadmap to the future of Bowman, developed on input from Bowman residents, from public involvement sessions with residents and through conversations with city staff and officials.

 

Bowman city and county officials also identified 11 areas of economic planning, in preparation for the future, as attracting government funding, business retention and expansion, downtown development, energy development, entrepreneurial development, growing reputation as a bedroom community, health care, infrastructure development, local regional tourism, pass-through visitor services and value-added agriculture.

 

As the community prepares for growth, James made note of the state’s plans for the legislature to incentivize drilling outside the Bakken.

 

Advanced in the 2013 session of the North Dakota State Legislature, Senate Bill 2336 proposed a two percent tax reduction for the first 75,000 barrels or first 18 months for wells outside of the Bakken or Three Forks formation.

 

The bill is intended to incentivize companies to drill outside of the Bakken and Three Forks formations.

 

Ed Schafer, former North Dakota governor and current board member of Continental Resources, blasted this aspect of SB 2336.

 

“The incentive for drilling outside the Bakken is not needed. If one would just track what is happening in North Dakota, it is easy to see that the drilling activity outside the Bakken will increase,” Schafer said.

 

While the possibility for substantial oil drilling still is a few years off, there is no guarantee of the amount of oil that might be captured.

 

“We must plan for the inevitable,” James said. “If it doesn’t happen, then oh well.”