There’s no need for the oil patch to wait for the return of $100 oil to see big profits. Astounding advancements in technology in the oil fields, since the bust, has so reduced production costs that “boom” profit margins are now being realized at much lower prices per barrel.
That means that as the price now reaches $70 a barrel, “wells in North Dakota are turning into cash cows,” reports Bloomberg.
For some wells the cost of getting oil to the surface now ranges between $40 and $50 per barrel.
Improvements to the fracking and horizontal well technologies are allowing producers to reach lengths “never before seen,” according to Bloomberg, allowing “most average wells in the Bakken” to become economical, to a degree that if West Texas Intermediate oil prices stay above $63 a barrel, “all average wells will be ‘in-the-money.’”
The primary challenge facing the Bakken now is to develop gas pipelines to take fuel to “more- promising markets.” Without those pipelines there has been an increase in “flaring” – burning off the gas.
A Billings-based company has developed some of that new technology which addresses the challenge of flaring. Under the direction of founder and President Brian Cebull, GTUIT’s proprietary technology allows producers to reduce flaring while at the same time capture the value of a fuel which has a very real market value. As of the beginning of the year GTUIT had recovered and processed over 1 million barrels of NGLs since 2012, preventing the emissions of more than 300,000 tons of CO2.
Operating worldwide, the GTUIT mobile and modular gas processing units remove the NGLs, which GTUIT markets, and produce a conditioned residual gas stream which can also be monetized.
The company recently announced the expansion of its services to include Kraken Oil & Gas, LLC. Kraken will have a fleet of GTUIT 1000 MCFD units as well as a 3000 MCFD unit with total gas processing capacity of 7 MMCFD. Kraken Oil & Gas is currently running three rigs, according to its president, Bruce Larsen. Since its inception in 2012, Kraken has drilled nearly 80 wells and currently operates more than 150 Bakken and Three Forks wells in North Dakota and Montana. “GTUIT provides NGL recovery and flare gas capture that allows us to continue our ongoing development and grow oil production in North Dakota and Montana,” said Larsen.
GTUIT’s flare capture services help Kraken Oil & Gas to reduce air emissions and to meet the State of North Dakota Industrial Commission gas capture requirements as well as federal air emissions regulations. GTUIT will be providing 7,000 MCFD of processing capacity at multiple well locations in Montana and North Dakota.
“Our services help them bridge the gap until their midstream capacity comes on line by providing gas processing in producing areas that lack infrastructure. Kraken’s well locations in eastern Montana and western ND help GTUIT expand our growing service footprint in the Bakken” explained Cebull.