DICKINSON, N.D. - Marathon Oil has become the first company to try modern horizontal drilling in the Tyler Formation of southwest North Dakota.
If successful, Marathon could be the first of many companies to drill that way in the Tyler, a geologically complex formation that is viewed by many as the Bakken's little brother. The formation has produced oil from vertical drilling in the past, but most of the oil that can be recovered that way has been tapped by now.
Though it doesn't have all the potential of the Bakken, the Tyler is similar geologically, which allows Marathon to use Bakken techniques there.
Marathon showed interest in the formation after Timothy Nesheim and Stephan Nordeng of the North Dakota Geological Survey began writing reports on the Tyler's potential about three years ago.
Marathon hasn't been the only company calling. Continental Resources, Whiting Oil and Gas, XTO Energy Inc., Enerplus Resources and Williston Exploration have recently cut sample cores of the Tyler, Nesheim said.
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Marathon started drilling a well in northeastern Slope County this month and has permits to drill four wells in the Tyler.
Area impact
If Marathon is successful, state Department of Mineral Resources Director Lynn Helms said small towns such as Amidon and New England south of Dickinson could grow. He said development of the formation now is where the Bakken was in 2004 as horizontal drilling began to tap new wells.
"Probably most of the workers that would service the drilling rigs and that sort of thing would come out of Dickinson," he said, "but if you look at the town of Dunn Center (north of Dickinson in Dunn County), there are new oil company offices there, there's a revitalized downtown, there's housing being developed for permanent employees to operate wells."
Water is another story.
Rep. Mike Schatz, R-New England, said the area likely needs more water supply either way, especially if New England becomes a hub city for Tyler development.
But Southwest Water Authority CEO Mary Massad says it would be difficult to expand water infrastructure in such rural places.
"There are some areas especially in Hettinger and Slope County where we are kind of challenged, water-wise, and people are gonna have to look at alternatives" such as well water or limited supply water storage, she said.
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New prospects
Marathon estimates it'll get about 1.6 million barrels of oil equivalent from the four Tyler wells. The company's Bakken vice president Terry Kovacevich and spokesman John Porretto wouldn't elaborate on its plans.
Since the late 1950s, when drilling began in North Dakota, vertical drilling has produced about 85 million barrels of oil from about 288 Tyler wells, Nesheim said.
As far as vertical drilling, "the Tyler kind of ran its course," he said.
Marathon has also taken on the Tyler now because most of its Bakken wells are producing at this point, Helms said, "so they're looking at new prospects."
The Tyler will vary across North Dakota more than the Bakken does, which means companies would likely have to use more diverse techniques to produce oil.
Marathon's Tyler wells are in organic-rich limestone layers that average 5.5 percent "total organic carbon," Nesheim said.
"Organic-rich rock intervals generate oil and gas, and rocks with greater than 4 percent TOC are typically considered excellent quality in the oil and gas industry," he said.
