Montana, North Dakota Oil Directors Talk Prices, Expectations

By The Bakken Magazine Staff | March 02, 2016

Eastern Montana, the birthplace of the Bakken shale oil play, remains an integral part of the Williston Basin with roughly 65,000 barrels of oil per day produced from wells targeting the Bakken or Three Forks formations. Starting this year, Alan Olson, oilfield veteran and former state legislator, will help lead Montana’s Bakken and statewide oil industry in his role as Executive Director for the Montana Petroleum Association. Olson has spent 38 years in the oil industry and said he’s seen wild upswings and steep downturns. “Every day is a new experience,” he told The Bakken magazine. “Some of the experiences, some of the projects you get to work on is what keeps you going,” he said.

A former Halliburton and Sanjel employee, Olson also spent time working as a field inspector for the Montana Board of Oil and Gas Conservation. Regarding the current oil industry environment, Olson said it will be a challenging year ahead. “We need to have discussion on what does it take to survive,” he said, adding that it has to be a broad discussion involving several oilfield entities. While those talks take place, Olson believes the future for Montana’s oil industry will get stronger as prices rebound. At current prices, he believes oil has bottomed out.

“The cure for low prices is low prices,” he said.

Lynn Helms, director of the North Dakota Department of Mineral Resources Oil and Gas Division, is also an industry veteran. Unlike Olson, Helms has one client to represent, the state of North Dakota. To do so, Helms’ frequently talks with oilfield personnel from North Dakota to Texas. During an annual industry event in Houston earlier this year, he learned that many in the industry expect low oil prices for longer than they originally expected last year. Operational plans are being made for the rest of the year and early 2017 based on current prices.

Despite low prices, Helms has the same positive outward attitude towards the industry as Olson does. Part of the positivity is related to input from oil producers. “Operators and service companies still think they have a lot of efficiencies to gain,” he said. Through various forms of technology upgrades, many producers believe they can economically retrieve oil and gas resources from the Bakken.

The price point that would spur on additional drilling and well completion activity in North Dakota’s Bakken could now be $40 to $50/b Helms said.