MAY 2013
The
Efficiency
Effect
How footprint reduction and cost-cutting strategies influence production Page 16
Plus:
Finding Success in the Frack Sand Business Page 24
AND:
Engineering a Better Water Supply Page 28
Construction Update: Commercial and Residential Page 12
www.THEBAKKEN.com Printed in USA
www.mbienergyservices.com
MBI Energy Services is North Dakota’s largest independent diversified oil field service company. Commitment to innovaƟon and safety are values that govern the way we do business. With our proven experience, strategic locaƟons and integrated services, MBI is commiƩed to responsibly growing with North Dakota’s oil and gas industry.
CONTENTS
MAY 2013
VOLUME 1 ISSUE 2
DEPARTMENTS
MAKING IT
24 True Grit with Preferred Sands
The sand business has been good to Preferred Sands. For the past five years, the Wisconsin-based frack sand provider has become a major player in the hydraulic fracturing industry. BY CHRIS HANSON
INNOVATORS
26 Technology Above Ground
From e-ticket load tracking software housed in a smartphone to flexible hose capable of connecting a water depot to a well site six miles away, innovation is everywhere. BY LUKE GEIVER
CONTRIBUTIONS
PLANNING
28 Helping Oil-Impacted Cities Grow Responsibly
Advanced Engineering and Environmental Services tackles water and wastewater issues in western N.D. BY HEATHER SYVERSON
EXPLORATION AND PRODUCTION
Drilling for the Future New technologies and cost-reduction strategies have changed the production process, and landscape in the Bakken. BY LUKE GEIVER
Pg 16
4 Editor’s Note
The Greatest Influence BY LUKE GEIVER
6 N.D. Petroleum Council
Groundbreaking Opportunity BY TESSA SANDSTROM
8 Bakken News
Bakken News & Trends
12 Construction Update The Buildout
MAY 2013
The
(ɤFLHQF\
(ɣHFW (ɣHFW
How footprint reduction and cost-cutting strategies influence production Page 16
Plus: Pl
Finding Success in the Frack Sand Business Page 24
AND:
Engineering a Better Water Supply Page 28
Construction Update: Commercial and Residential Page 12
www.THEBAKKEN FRP Printed in USA
ON THE COVER: A drilling rig in McKenzie County, N.D. Experience gained on projects like this are helping to reduce drilling costs on new wells. PHOTO: OVERLAND AERIAL PHOTOGRAPHY
THEBAKKEN.COM
3
EDITOR'S NOTE
The Greatest Influence Luke Geiver
Editor The Bakken magazine lgeiver@bbiinternational.com
The oil patch is evolving. The change may be slower or smaller than some might hope, but it is happening, spreading from the well site outward to frack sand mines in Wisconsin, logistics oďŹƒces in North Dakota and well-completion technology centers in Calgary, Manitoba. Just four years ago, race, rush and other words depicting the frenetic pace and pressure faced by operators securing lease acreage through drilling or production activity were accurate. Today, the atmosphere of the play is still frenetic but it is influenced by different factors, and best described by different words. We spoke with operators and nonoperators for the May issue to help explain the current state of drilling and production. The new buzz in the Bakken is now less about fulfilling lease terms and retrieving oil for a return on investment and more about applying new strategies. The new approaches will reduce overall production costs and decrease the above-ground footprint needed for drilling rigs, pump jacks and storage tanks. So, efficiency is the new buzz. It affects every facet of the region. The majority of all acreage today in the Bakken region is Held By Production, a term that indicates a lessee has fulfilled lease terms and has the rights to any production in those acres for the lifespan of any wells brought online within the boundaries of the leased acres. Because of that, drilling teams and production companies are not as focused on getting the first well in the ground as they are in building the infrastructure and setup needed to sustain a spacing unit (1,280 acres) for multiple wells over multiple years. They are planning for infill development, an approach predicated on surrounding a proven well with more wells. This means a rig could be on a single site longer, and planning protocols used in 2009 by water supply or disposal teams, oilfield service providers and others must be tweaked for current conditions. With evolution comes innovation. Included in this issue are the stories of several innovators who are streamlining the Bakken. Software company Qv21 Technologies has designed an e-ticket tracking system specifically for Android operating systems that makes conducting business more efficient by wirelessly recording miles, loads and hours. The reduction of paper ticket usage is a prime example of how innovation connects to evolution. To truly understand what the combination of evolution, changing strategies and innovation look like, imagine it this way. The current Bakken landscape is similar to a housing subdivision, as Tom Rolfstad, executive director for the Williston Economic Development office, explains. One well on the horizon may seem oddly placed, but it is only one of many that will someday make up a well-ordered grid that will take years to develop.
4
The BAKKEN MAGAZINE MAY 2013
ADVERTISER INDEX
www.THEBAKKEN.com VOLUME 1 ISSUE 2 EDITORIAL Editor Luke Geiver lgeiver@bbiinternational.com
13
Advanced Engineering and Environmental Services, Inc. (AE2S)
Senior Editor Susanne Retka Schill sretkaschill@bbiinternational.com
19
Altitude Analysis, Inc.
Staff Writer Chris Hanson chanson@bbiinternational.com
21
Automated Financial Services
22
Consolidated Telcom
30
Diverse Energy Systems
18
Jacam
Copy Editor Jan Tellmann jtellmann@bbiinternational.com
PUBLISHING & SALES Chairman Mike Bryan mbryan@bbiinternational.com
2
CEO Joe Bryan jbryan@bbiinternational.com
23
President Tom Bryan tbryan@bbiinternational.com
14 & 15
MBI Energy Services Quality Mat Company Safe-T-Pull
Vice President, Sales & Marketing Matthew Spoor mspoor@bbiinternational.com
31 The Bakken Magazine
Vice President of Content Tim Portz tportz@bbiinternational.com
20
Ulteig Engineers
32
Williston Basin Petroleum Conference
Business Development Manager Bob Brown bbrown@bbiinternational.com Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com Senior Marketing Manager John Nelson jnelson@bbiinternational.com Advertising Coordinator Marla DeFoe mdefoe@bbiinternational.com
ART Art Director Jaci Satterlund jsatterlund@bbiinternational.com Graphic Designer Lindsey Noble lnoble@bbiinternational.com
Subscriptions Subscriptions to The Bakken magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www. thebakken.com or you can send your mailing address and payment (checks made out to BBI International) to: The Bakken magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising The Bakken magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about The Bakken magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to The Bakken magazine/Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgeiver@ bbiinternational.com.
COPYRIGHT © 2013 by BBI International TM
Please recycle this magazine and remove inserts or samples before recycling
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THE MESSAGE NORTH DAKOTA PETROLEUM COUNCIL
THE FIRST SINCE 1976: The Dakota Prairie refinery will be North Dakota's second diesel refinery, and the first to be built in the U.S. since 1976.
Groundbreaking
Opportunity BY TESSA SANDSTROM Photos by MDU RESOURCES GROUP INC.
In the same way that the Bakken pioneered the technology that has led to our nation’s recent shale-energy revolution and helped our nation increase its domestic production for the first time in decades, North Dakota is breaking new ground on something that hasn’t been done in 37 years—constructing a new refinery. In late March outside of Dickinson, MDU Resources Group Inc. and Calumet Specialty
6
The BAKKEN MAGAZINE MAY 2013
Products Partners broke ground on the Dakota Prairie refinery, making it the first new refinery to be built in the United States since 1976. The Dickinson Press recently editorialized that the Dakota Prairie refinery is a symbol of national progress. The fact that a new refinery will be built for the first time in nearly four decades is a major accomplishment for our nation, but an even bigger accomplishment for our state. Even as recently as five years ago, the question in the minds of many of our state and local leaders was how to spark economic growth in our rural communities. Today, North Dakota has become somewhat of an economic dark horse, rising from being a “large rectangular blank spot in the nation's mind” to an economic powerhouse that has been largely insulated from a national recession. While the nation continues to suffer with high unemployment, our state has grown jobs at a rate of 31 percent since 2000. Michael
THE MESSAGE
SHOVELS DOWN: Executives and several state leaders mark the site where the Dakota Prairie refinery will stand, west of Dickinson, N.D.
Ziesch of Job Service North Dakota commenting recently on that job growth noted: “For the first time in probably forever, it was the rural areas.” Part of the reason for North Dakota’s economic growth is due to the Bakken formation’s vast oil reserves. Oil production has brought substantial wealth to many, including mineral owners and our state government, but the Dakota Prairie refinery represents the increasing potential the state has to seize new value-added opportunities and capture even more of those dollars and jobs within the state. The refinery will process 20,000 barrels of Bakken crude a day to produce diesel fuel, which, due to our growing agriculture and energy industries, remains in high demand. Furthermore, located between Dickinson
and South Heart, N.D., the refinery will be built in a primarily rural area, bringing about 400 to 500 temporary construction jobs during peak construction and 100 permanent jobs to the area. While the Dakota Prairie refinery is located near its oil source, new, value-added opportunities are not limited to western North Dakota. A plant is being planned for Jamestown, N.D., that will use natural gas to produce fertilizer, another product, that like oil, our nation must import. This plant will not only create a domestic supply of a much-needed product, but will create between 100 and 150 jobs for the Jamestown area. These projects are just a few examples of how our energy industry helps diversify our economy to create even longer-term growth and stability for our state and nation.
LEADING THE EFFORT: During the event, Gov. Jack Darlympe drove a bulldozer to kick-off the land clearing process.
In fact, across the nation, we are seeing this trend as manufacturers relocate to the United States for its inexpensive energy source and growing demand for products used in energy development. This is a positive trend and one that presents a promising future for our nation. With the continued development of our domestic energy resources, we can expect to see growing opportunities. One needs to only look at North Dakota—a once
half-forgotten state on the Canadian border—and these new projects to see how domestic energy production can reduce our dependence on foreign energy while creating new opportunities, economic wealth and permanent goodpaying jobs for our citizens right here at home. Author: Tessa Sandstrom North Dakota Petroleum Council 701-557-7744 tsandstrom@ndoil.org
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7
BAKKEN NEWS
BAKKEN NEWS & TRENDS
71% 16% 13%
captured and sold
flared without capture or sold
flared due to existing takeaway challenges
The Natural Gas Misconception Economics are not restricting natural gas-gathering efforts in the Bakken play. Natural gas prices may be low, but, in fact, “there is an economic incentive to reduce flaring,” says Jason Kringstad, director of the North Dakota Pipeline Authority. Flaring is a method used to dispose of associated gas at the top of a vertical stack to reduce the pressure created through oil extraction. “There is a big misconception that gas is being flared because it is priced so low,” Kringstad says. Associated gas produced from a Bakken or Three Forks Formation well has many uses outside of the methane used for heating. Natural gas liquids (NGLs) make up portions
8
of the gas, and those NGLs can be sold for use in lighter fluid (butane), gasoline (heptane) or propane tanks (propane) The main reason for continued flaring is directly linked to what happens below ground. A lack of takeaway capacity means associated gas must be flared, Kringstad explained in a webinar update on the state of flaring in the region. “We need to get more pipe in the ground,” he said. Currently, 71 percent of all associated gas produced in the oil and gas play is connected, captured and sold. Of the remaining 29 percent, 13 percent of the gas is connected to pipe but must still be flared for a number of reasons. The other 16 percent is flared
The BAKKEN MAGAZINE MAY 2013
because there are no pipelines present to gather and transport the gas. To reduce the 16 percent currently flared, the answer is simple: more pipeline takeaway capacity. For the other 13 percent, the solution is more complicated. When new wells come online, the compression rate increases in older wells, causing more gas to surface in the older wells, thus requiring a compression system to handle the increased pressure. In addition, the pipeline that is already in operation is not only at capacity, but it needs more frequent cleaning, or pigging. The process clears out NGL’s that settle within the pipes and reduce flow efficiency. “The other
solution that needs to happen,” Kringstad said, “is to consider looping the systems. The pipelines are adequate enough to handle new gas coming online.” Each month, roughly 150 wells are connected to gas-gathering pipelines, and within the next six years, six gas-gathering plants will have expanded. The trend towards flaring reduction not only makes sense, but it is starting to happen. According to Kringstad, that trend is crucial to the region. “Over time, we expect the natural gas to outpace the crude oil. There is still a lot of understanding that we need to have. There is some substantial gas potential that is coming.”
BAKKEN NEWS
Tracking a Population Phenomenon Nancy Hodur and Dean Bangsund have been tasked with a unique challenge: track the population in Dickinson, N.D. and Williston, N.D., at a time when data only a month old is out-ofdate. “There is a large workforce that works in North Dakota but lives elsewhere,” Hodur tells The Bakken magazine, “and the census isn’t going to capture that population.” To overcome old data and include the temporary workforce, or service population as the team calls it, the team had to get creative. “There aren’t any models existing out there that do what we have done. We have in some sense invented this modeling," Hodur says. The economists created two population estimate models. The build-out model is linked to the housing offerings currently in the tested region. “The concept
Petroleum Sector Employment by Type of Employment North Dakota Consensus Scenario 60,000
50,000
40,000
30,000
20,000
10,000
0
Drilling & Fracing
Oil Field Service
Gathering
Total
Department of Agribusiness and Applied Economics, North Dakota State University
is pretty simple. Total up how many beds you have and you can come up with an estimate of a service population,” Hodur says. To do that, the team compiled all construction, workforce housing permits, RV park lists, and other lists from 2010 until now that would indicate a bed is present. Bangsund says the build-out
model is a pretty firm account of the number of bodies in the tested region, a reality check, she says, of the number of people in the region. The second model developed by the team is linked to current employment numbers and the numbers needed for future employment. This model
Petroleum Sector Employment North Dakota Consensus Scenario 60,000
50,000
40,000
30,000
20,000
10,000
0
Temporary Direct
Permanent Direct
Department of Agribusiness and Applied Economics, North Dakota State University
involved using several coefficients in a formula that Bangsund says, helps to predict the expected path forward for population by accounting for oil and gas retrieval projections and the services linked to each segment of that projected timeline. The conclusions for the work are many. First, both models, to the surprise of Hodur and Bangsund, arrived at the same end. The cities are growing and will continue to grow until populations nearly double over the next decade. Second, their work may never be complete, because, as more housing comes online, more services are required and the families of the service population move in. And third, people who aren’t familiar with the phenomenon happening in the Bakken are struggling to understand that this play does not exhibit the traditional boom and bust cycle of other plays. “The hesitation and conservatism that this is not going to be around that long is a real detriment to getting geared up and taking on this challenge,” Bangsund says.
THEBAKKEN.COM
9
BAKKEN NEWS
Coiled tubing inside the work string provides a circulation path for abrasive slurry to flow out the frack ports.
A resettable plug grips and shifts the sliding sleeve to isolate a fracture zone.
This entire bottom hole assembly, or mongoose tool, can allow for fractures to be completed every five minutes by eliminating the need for ceramic balls or plug isolation.
Fracture ports allow the abrasive slurry to be jetted into the formation, creating the shale fractures.
The Tool for Unlimited Frack Stages The typical number of discrete fracture stages, portions created in the process of shale stimulation used to open oil reservoirs for better flow rates, on a Bakken-based well is around 25. NCS Oilfield Services has created a multistage system that is anything but typical. Earlier this year, NCS completed 50 frack stages on a single well, and if the drilling team had wanted more, NCS’ technology could have done it. The main components of the system are frack sleeves and a bottom hole assembly called the mongoose tool. The system allows
the driller to place multiple fractures into the rock without the need for ceramic balls or plugs used to portion off one fracture zone from the next. Using the traditional plug-andperf or ball sleeve completion method, means a lateral can only be fractured a limited number of times due to the space requirements necessary to properly portion off one fracture zone from the next. According to Eric Schmelzl, principal engineer, who helped design the system, drillers have said the tool wouldn’t work and unlimited fracture stages in a single well were
Leading the Way In only 6.5 years, the U.S. could become a net exporter of natural gas, according to the U.S. Energy Information Administration. The supply of shale gas from the Bakken will be a large factor. In its 2013 outlook on shale gas and tight oil developments, the EIA has projected that both shale gas and tight oil produced from the Bakken will be among the leading suppliers from shale plays in the country. Although takeaway capacity for both oil and gas in the Bakken play represents the largest obstacle for greater use of the region’s resources, the EIA offered its own assessment of larger factors that could impede the use of gas and tight oil. Dependence on imported liquids in the future, the EIA says, will depend on both supply and demand and a number of other uncertainties that include: resource quantities and distribution, surface versus mineral rights, risk appetite of industry participants, infrastructure and technology advancements, and, environmental constraints. For Lynn Helms, director of the North Dakota Department of Mineral Resources, the main concerns of producers in the region 10
The BAKKEN MAGAZINE MAY 2013
not possible because of the limited space each lateral has. “We have a tremendous database of successful frack rates in the 99 percent range,” he says. But, most drilling teams aren’t willing to try the system until they see it in action on a nearby well. A recent client of NCS, however, was willing to try the trademarked multistage unit, and now that client is unwilling to disclose this completion methodology to others, Schmelzl says. But, that’s not a bad thing. “They said, 'we think we have an edge (by using the NCS technology) on our competition.'”
Domestic Shale Gas Production
shale gas production (dry) billion cubic feet per day
SOURCE: U.S. Energy Information Administration
continue to be environmental constraints or regulations affecting proven operational processes. Robust areas include: demand for product is strong, mineral rights are always acquirable, industry participants are not displaying risk averse tendencies, infrastructure is coming and the technology is already proven.
To become a royalty owner, look for:
BAKKEN NEWS
The Truth About Royalties There is more to owning mineral rights than receiving a royalty check in the mail every month. The National Association of Royalty Owners calls the ownership of mineral rights an asset, and NARO recently opened a division in North Dakota to provide mineral owners with access to information and advice about handling those assets. Besides N.D., the organization also operates in the other major shale plays in the U.S., from Texas to Pennsylvania, helping families and organizations handle their royalty payments from one generation to the next. In only three years in the Bakken play, royalty payments and lease terms for production companies have drastically changed. In 2010, the average per-acre price for land in the Bakken was roughly $300 to $600 per acre. Today, land lease prices start at $2,000 per acre. In 2010, royalty payments equaled roughly 18 percent of gross production on each well. Today, royalties are paying out at more than 20 percent. “Most important, royalty owners are not responsible for any of the cost or risk associated with E&P (exploration and production) development or property
Reputable operators with expertise to expand the life of the fields
Royalty payments that come from new locations,
development,” says possible areas and probable areas Parker Hallam, chief Royalties from several states and counties to operating officer of mitigate risk of weather-related shut-downs Brietling Oil and Gas Corp. But, because roy- Predictable well-decline curve alty payments are based off the gross production and not on the net, purchase. But, according to Hallam, with the he says, “The income stream that you receive risk comes the reward of higher royalty payments (off net production) and 100 percent is directly tied to the commodity price. If oil tax advantage during the year the well was goes down, so does your check.” drilled. And 15 percent of the money earned Along with the fluctuating price of oil, from the production of the well is considered mineral rights and royalty incomes require attention because of the simple nature of the a depleting asset, and taxes aren’t required on asset: it is always depleting. But that shouldn’t that 15 percent. Investing on the royalty side brings zero stop any qualified individual from becoming a royalty owner. A person can become a royalty liability and zero stake in the production of owner even if he or she doesn’t own mineral the well. The payments are based on the gross, but 15 percent of payments received rights or land in the play. Breitling is one of still qualify as depleting assets. A person can many companies that offer people a chance sell a royalty just like a property and avoid to invest in oil and gas. The company offers potential investors the chance to invest in the capital gains taxes. “We bundle up small perproduction and drilling side of a well, or, just centages of many different wells and acreages so you own a percentage of a very large pie,” the royalty side. Investing on the drilling side does mean Hallam says. "Right now it is an exciting time because we know a lot about these oil fields.” 100 percent of the drilling costs and liability associated with the process is part of the
The Secondary Effect David Ganje is a third-generation South Dakotan, natural resources attorney and, after his silica sand mining operation opens in 18 months, a prime example of someone linked to the Bakken’s secondary effect. As Ganje explains it, S.D. can be classified into that secondary effect because although the state is not participating in direct oil or gas production, its economy is clearly affected. In early 2012, Ganje cofounded Cambrian Enterprises LLC, a frack sand mining company that he hopes will play a large role in several states. Cambrian has already issued requests for proposals from potential mining firms, and expects to be through permitting and in operation in roughly 18 months. Cambrian has the rights to roughly 600-acres of land in the S.D. counties of Custer, Lawrence and Pennington. Silica sand from each location has already been tested by two third-party testing labs and, according to Ganje, the quality of the sand meets the American Petroleum Institute’s hydraulic fracturing sand requirements. Sand from the locations would be shipped via truck to warehouses in North Dakota or Montana for use in the oil retrieval efforts. “The Cambrian claims when developed into a mining operation,” Ganje says, “would be the westernmost known silica sand mining operation in the U.S.” The Cambrian mines wouldn’t however, be new to the region. The Black Hills region has established mining operations, and gold mining in
SILICA SLICE: A silica outcropping in S.D. PHOTO: CAMBRIAN ENTERPRISES LLC
the Black Hills has been ongoing since the 1870s. The largest producing gold mine in North America, the Homestake Mine, is right next door near Lead, S.D., and Deadwood, S.D. Oil and gas production may not be a primary driver of development within South Dakota, but Ganje says he is seeing signs that it will. Natural resource attorneys are busy, and land acquisition specialists have started to travel the state to lease mineral acres. “You are seeing much more activity in S.D.,” he says, “than you have seen since the 1950s. Science and technology indicates there is some potential in S.D., and you see leasing at a number you didn’t see before.” The secondary effect and frack sand supply isn’t just about South Dakota either. Wisconsin currently provides more than two-thirds of the frack sand used in the Bakken, and recently, Northern Frac Proppants LLC, a Wisconsin-based company, signed a sand supply agreement with CARBO Ceramics, a global proppant supplier with a large presence in the Bakken.
THEBAKKEN.COM
11
CONSTRUCTION UPDATE
Commercial and Residential
IMPROVING THE REGION: Construction has begun at home improvement retailer Menards just outside of Dickinson, N.D. PHOTO: ROERS DEVELOPMENT INC.
The Buildout Pick a community in western North Dakota, and chances are construction of some kind is happening. The Bakken magazine Construction Update offers a glimpse into a handful of the commercial, residential and industrial projects currently under development, or slated to begin soon. The list of projects included is not comprehensive or all-inclusive, but it does highlight the incredible number of gas stations, apartments, business suites, grocery stores, home improvement centers, fitness facilities and other buildings that are starting to offer new and existing population centers affected by oil and gas retrieval more square footage for buying and supplying goods and services, a place to do business or even to call home. The projects included in the list didn’t happen overnight for the developers and construction firms involved. Larry Nygard, vice president of Fargo-based Roers Development Inc., one of the most successful Bakken developers in the region, has insight that applies to all developers on all projects. “If I didn’t have infrastructure hurdles,” Nygard says, “my job
would be easier.” The Construction Update may provide the facts about a new project, but it doesn’t provide the whole story, as Nygard’s comment shows. These projects have overcome unforeseen plumbing issues, weather delays, zoning problems and every other possible scenario. Mike Dunn, business development manager for Construction Engineers of Grand Forks, N.D., says clients want to focus on their day jobs and not subcontractors. Because of that, the company's ability to offer a client a single point of contact and handle all subcontracting issues, has helped it complete and plan several projects. Some developers, including Adam Berger, portfolio manager for Englewood, Colo.-based Consolidated Investment Group Inc., have had to head to the kitchen table to plan the best project possible. Berger did just that in Watford City to get feedback from residents on a new housing division. “We are spending a lot of time making sure that we are getting this right,” he says. For now, here is a list of projects that, up to this point, have been done right.
Construction Engineers
Construction Engineers
Location
Tioga, N.D.
Confirmed Tenants
Neset Consulting Service
Location
Williston, N.D.
Confirmed Tenants
Flying J Transload Addition
Project Type
Commercial, currently under construction
Completion Date
Early summer
Project Type
Commercial, currently in planning and development stages
Completion Date
Early summer
Square Feet
28,000
Synopsis of Progress
Square Feet
N/A
Synopsis of Progress
Acres
5
Located on N.D. Hwy. 40 at Tioga, N.D., the project is a Class A office and shop facility that includes offices, meeting space for up to 100 people, daycare, technical a shop and laboratory areas and parking.
Acres
40
The project consists of the development of a 40-acre industrial park for oil and gas-related services. The site has development potential for a water depot, rail access, material storage and industrial buildings.
Construction Engineers
Roers Development Inc.
Location
Watford City, N.D.
Confirmed Tenants
Watford City Elementary School
Location
Dickinson, N.D.
Confirmed Tenants
Menards, Cash Wise, Hilton Garden Inn Hotel
Project Type
Commercial, currently under construction
Completion Date
Late summer
Project Type
Commercial/ Residential
Completion Date
TBD
Square Feet
30,000-addition and 45,000-remodel
Synopsis of Progress
Square Feet
N/A
Synopsis of Progress
Acres
N/A
The project consists of a gymnasium, library and classroom addition project along with an extensive remodel and upgrades of existing common areas, classroom, food service and school grounds.
Acres
1,000
Utilities are installed and complete
12
The BAKKEN MAGAZINE MAY 2013
CONSTRUCTION UPDATE
Roers Development Inc. Location
Dickinson, N.D.
Confirmed Tenants
Sales to begin in spring
Project Type
Commercial/ Residential
Completion Date
TBD
Square Feet
N/A
Synopsis of Progress
Acres
120
Construction will begin in spring
Roers Development Inc. Location
Minot, N.D.
Confirmed Tenants
Sales to begin in spring
Project Type
Residential/ Housing/Industrial
Completion Date
TBD
Square Feet
N/A
Synopsis of Progress
AT THE HEART: Williston, N.D., is expanding in all directions. Mega-yards for oil and gas companies, hospitals, housing developments and more will be complete or started in 2013.
Acres
100
Starting in May
PHOTO: OVERLAND AERIAL PHOTOGRAPHY
Oppidan Investment Company
Oppidan Investment Company Location
Minot, N.D.
Confirmed Tenants
Cash Wise Foods, Cash Wise Liquor, Cash Wise Express Gas Station, Petco, Shoe Carnival, Gordman's, and Great Clips
Project Type
Commercial
Completion Date
TBD
Square Feet
180,000
Synopsis of Progress
Square Feet
150,000
Synopsis of Progress
Acres
19
Construction has begun
Acres
20
Construction is expected to begin in the spring of 2013
Location
Stanley, N.D.
Confirmed Tenants
Cash Wise Foods, Cash Wise Liquor, MainStay Suites, O'Reilly Auto Parts
Project Type
Commercial
Completion Date
TBD
Thinking Big...
GOING BEYOND
in the Bakken
ÂŽ
www.AE2S.com
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WATER ENGINEERING | WASTEWATER ENGINEERING | CIVIL ENGINEERING | LAND DEVELOPMENT | SURVEY/MAPPING/GIS INSTRUMENTATION & CONTROLS | ELECTRICAL ENGINEERING | STRUCTURAL ENGINEERING | FINANCIAL/ASSET MANAGEMENT
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13
CONSTRUCTION UPDATE
PROJECTS DONE RIGHT: City planners and oil and gas companies want to focus on their own industries, not on dealing with subcontractors, according to Mike Dunn, business development manager for Construction Engineers. PHOTO: CONSTRUCTION ENGINEERS
Oppidan Investment Company
Oppidan Investment Company
Location
Tioga, N.D.
Confirmed Tenants
Cash Wise Grocery, Cash Wise Liquor
Location
Watford City, N.D.
Confirmed Tenants
Cash Wise Grocery, Cash Wise Liquor, Alco, Z Wireless, McDonald's, Happy Rice Buffet
Project Type
Commercial
Completion Date
TBD
Project Type
Commercial
Completion Date
July
Square Feet
47,000
Synopsis of Progress
Square Feet
120,000
Synopsis of Progress
Acres
6
Construction began in April
Acres
12
Construction is expected to be complete in July
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Meyer Real Estate Group Location
Dickinson, N.D.
Confirmed Tenants
Meyer Real Estate Group, R&H Supply, SAIC, CED, Sagebrush Oilfield Services and Frito Lay
Project Type
Industrial
Completion Date
Spring
Square Feet
38,000
Synopsis of Progress
Acres
76
For sale, lease, or build-to-suit land available.
Meyer Real Estate Group Location
Dickinson, N.D.
Confirmed Tenants
N/A
BUILT BIG AND READY: Industrial park buildings are in high demand in the region, including this building built by Meyer Real Estate Group in Dickinson, N.D.
Project Type
Commercial/Retail
Completion Date
2014
PHOTO: MEYER REAL ESTATE GROUP
Square Feet
N/A
Synopsis of Progress
Acres
85
The Shoppes At Pinecrest Commons will offer 80-acres of commercial/retail, 4.1-acres of hospitality space and 70,000 square feet of medical/office space.
Consolidated Investment Group
Consolidated Investment Group Location
Watford City, N.D.
Confirmed Tenants
N/A
Location
Watford City, N.D.
Confirmed Tenants
N/A
Project Type
Residential
Completion Date
TBD
Project Type
Commercial
Completion Date
TBD
Square Feet
516 Units
Synopsis of Progress
Square Feet
Mixed-Use
Synopsis of Progress
Acres
43
Called The Highlands at Watford City, the project will include singlefamily homes, townhomes and apartments.
Acres
871
Located near U.S. Highway 85. Construction to begin in summer.
™
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100 MODELS ON HAN D
EXPLORATION AND PRODUCTION
THE FOOTPRINT: Drilling efficiencies and a push for cost reduction means wells will be drilled closer together. PHOTO: OVERLAND AERIAL PHOTOGRAPHY
16
The BAKKEN MAGAZINE MAY 2013
EXPLORATION AND PRODUCTION
Drilling for the FUTURE New strategies and HBP’ed acres have started the second stage of activity. By Luke Geiver
The current state of drilling activity in the Bakken formation can be explained by a single three-word phrase: Held By Production. The phrase may sound simple––it refers to a mineral lease that has been secured for the life of the well by the lease holder through oil production or drilling activity––but its role in the transformation of the rural landscape spanning the majority of the play is incredibly complex.
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EXPLORATION AND PRODUCTION
The HBP lease has influenced drilling strategies, oilfield service supply inventories, logistics scheduling and any other person or industry linked to oil and gas production and the three-year lease terms typically required of a producer before that producer loses its lease. If anything has been responsible for the immense activity over the past four years, the rush of trucks, backlog of hydraulic fracturing services or even the once-unmet demand for drilling rigs, it's that phrase. A return on investment or the price of oil will always stimulate activity, but the possibility of losing a nearly guaranteed spacing unit, the legal geographical boundary in which a drilling team can operate, and its oil resources below ground, has proven to be an even greater motivator for drilling activity. Although the majority of leasable acres in the main core of the Bakken have been HBP’ed, understanding how the play was developed in the past can help everyone affected by the play as they plan for the future.
The HBP Factor "All of the operators face lease expiration issues and plan just to get that first well drilled so that the lease can be held," says Ken DeCubellis, CEO of Black Ridge Oil & Gas, a nonoperating firm that currently controls over 12,000 net Bakken and Three Forks acres. “When you are scrambling to get a rig mobilized to get a lease Held By Production, you kind of put economics on the back burner,” he says. When a spacing unit has qualified for HBP status, those acres are awarded to that producing entity for the life of the well. Until now, the play has been driven by the need of producers to secure their acres for future development. Tom Rolfstad, executive director of Williston, N.D.’s economic development office, says the drilling activity and strategies used can be classified into three stages: territorial, infill development, and enhanced oil recovery. The territorial stage is best described as chaotic, with producers forgetting economics as DeCubellis
explains, or as Rolfstad says, it’s like being at Walmart on Christmas day. The time frame of this stage is influenced by lease-terms present in a play. For the Bakken, the majority of NONOPERATOR: DeCubellis leads Black leases have required Ridge Oil & Gas' efforts activity in three years. to buy and sell Bakken With leasing activity acres. starting roughly five to seven years ago, most leases have now been secured and the rush to buy or lease available acres has ended, according to Rolfstad. Because of that climax in HBP activity, the landscape that once seemed to be sprinkled with randomly placed rigs, pumping units and storage tanks has begun to appear more ordered. Think of it as a housing subdivision. Before the majority of houses are in place, a single home at the end of the street seems out of place. The landscape is becoming industrial-
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The BAKKEN MAGAZINE MAY 2013
EXPLORATION AND PRODUCTION
ized, says Richard Gardner, senior fellow at the Rural Policy Research Institute Center for Rural Entrepreneurship, but with the end of the first stage of drilling activity in the region happening now, that industrialized landscape won’t mutate into a cluttered land of steel. Producers are now concerned about economics, focusing more on drilling efficiencies and resource price reduction. The goal of producers is not motivated by the need to secure a lease area, but is instead driven by the need to extract oil and gas to pay off investors and buy supplies, materials and services for future activity. To do that, producers are transforming their drilling strategies, taking the elements and successful approaches used to drill one well and applying them to help drill multiple wells from a single pad, or reduce costs and improve efficiencies related to extraction, gathering or transport of crude and associated gas from the wells they
already have. Their efforts mean drilling sequences will be different now than in the past, and service providers, decision makers and investors will need to account and plan for the way a well comes online.
Moving Past HBP HBP may have dominated the strategies of exploration and production (E&P) companies in the past, but today the term to know is: infill drilling. Like HBP, infill drilling sounds simple, but its role in the play over the next decade or more, is complex. Infill drilling programs or infill development refers to an E&P company’s plans to drill more wells as close to proven, producing wells as possible. The desire to maximize production near a proven pad, has transformed the sequence of how a well is drilled today versus four years ago. Craig Slawson, co-owner and vice president of Slawson Exploration, the
WALKING FOR SPEED: Walking rigs can move 1,000 feet per day and reduce rig relocation times by almost two-thirds. Feet, or stompers, hydraulically shuffle the rig to a new location on the same well pad. PHOTO: ABRAXAS PETROLEUM CORP.
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19
EXPLORATION AND PRODUCTION
E&P company that has been active in the Bakken since the 1980s, says change has been a constant in the play. The company has drilled 250-plus wells, with another 1,000 more to go, he says. For the industry in its infill development stage, pad drilling will be the biggest impact of change, he says. The process involves walking rigs, units that can move up to 1,000 feet per day, cutting down relocation time by more than half. The rigs can drill multiple surface holes, then move to
drill kick-off points (the end of the vertical portion of a well before horizontal drilling begins) on other spudded wells (initial drilling has begun), and then move back to drill the horizontal laterals of the first wells on the pad so that a simultaneous frack job can happen all at once, he says. "Wells, therefore, may take longer to drill and complete at first,� Slawson says of the effects of pad drilling, but the footprint of rigs, and eventually well heads pumping on
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a 1,280-acre spacing unit, will be corralled into a single pad. “You cannot find oil if you don’t drill wells,� Slawson says, but a company shouldn’t act without doing its homework. And, according to Slawson there are other changes over the past four years in the play that will affect the future. “Drilling longer-reach laterals, advances in bit technologies, more reliable mud motors, reaming tools and logging while reaming have all helped," he says. Staged frack jobs, better transport fluids and technologies, proppant size and strength and better information on harvesting density have also helped. Take a look at the drilling projects under development by several Bakken operators and the trend toward infill drilling is clear. Samson Oil and Gas Ltd., for example, has already announced it has taken a 60 percent working interest in Williams County, N.D., to drill six infill wells that will be drilled next to three existing wells. The use of pad drilling for the purpose of infill development has another ramification. Because the site has already been prepared and the activity level at the site will be high, Samson will construct and use production facilities and pipeline from the site to reduce water disposal costs related to trucking. And, a gas gathering line and crude transport system are also planned. The company said it will fracture all of the wells simultaneously to develop a comprehensive fracture system. Gardner, who has worked for several N.D. communities to help each assess the economic impact of oil retrieval, says he has seen the trend in walking rigs, zipper fracking used to reduce fracking time and pipeline development on the well site. DeCubellis says he has seen many producers follow what he calls a best practice. “When they are ready to complete wells two, three and four, we are seeing them temporarily shut down that first well already in production. What a lot of producers are finding is that when you do that and build up the pressure in that first well,� he says, “it’s an efficient way to do a quasi-refrack of the first well.� What they then find, he adds, is after they restart the first well after infill development has been completed, is that production levels begin to step up.
EXPLORATION AND PRODUCTION
'All in all, this has been a fine model of how everyone can work together to manage this incredible expansion in such a short time, in often challenging climates.' Craig Slawson, Slawson Exploration
Operating During Infill Infill development of the Bakken play will be impressive. According to a recent presentation from Rolfstad and his team regarding how the landscape will be shaped, or, how the subdivision of wells (not houses) will be ordered, each spacing unit in the four main western N.D. oil-producing counties, will feature four horizontal wells per 1,280 unit in the Bakken formation and four horizontal wells per 1,280 unit in the Three Forks formation. Those estimates indicate that per township per county, each township will have 288 wells. Williams County has 60 townships. To successfully navigate infill development, companies such as Black Ridge Oil & Gas have to take an approach that is based on economics not production, according to DeCubellis. “For Black Ridge,” he says, “the biggest challenge that we have had is making sure that we are deploying our capital in the highest return projects that we have available. We’ve taken an approach that it doesn’t matter if we are looking at a new acquisition or a drilling and completing lease that we already control. If we don’t expect to get a 30 percent return or higher on those investments,
we don’t necessarily just blindly go ahead and spend the money.” If the return over the life of the well, roughly 25 years, can’t be projected to exceed that 30 percent mark, DeCubellis says the company will monetize the assets and move on to the next one. “We are taking a portfolio approach to the assets we have.” The company typically takes roughly up to 15 percent working interest in a well, a strategy that helps the company to take small bets on several ge-
ographies in the Williston Basin. The returns from those bets are paying off. The fiscal year of 2012 was the best ever for the company, and DeCubellis says 2013 will be even better. “It is really neat the way we manage our risk, but do it at a low cost. We just don’t need a huge overhead structure to operate this kind of business. Companies that operate in similar fashion to Black Ridge help indicate future trends in the industry. DeCubellis says he is starting
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21
EXPLORATION AND PRODUCTION
to see operators looking to sell their nonoperating assets. From a leasehold perspective, the entire region is fragmented out beyond the top 30 to 35 leaseholders in the Basin. “We look at fragmentation as an opportunity. We are able to go and acquire small working interest leaseholds that have development,” he says. Doing so helps the company meet the needs of large operators who are focused on drilling and completion. And, given the current state of drilling activity in the Bakken, their strategy makes sense. DuCubellis says operators are looking for platforms and opportunities that have several leaseholds within a single purchasable package to help the operators reduce transaction costs and take advantage of drilling efficiencies and during the infill period. Slawson, who says everyone needs to remember that “big oil fields just get bigger,” believes the development of the region is working. “All in all, this has been a fine model of how everyone can work together to manage this incredible expansion in such a short time, in often challenging climates.”
BAKKEN SPECIFIC: Abraxas Petroleum Corp. retrofitted a walking rig with controls designed to handle harsh winter weather. PHOTO: ABRAXAS PETROLEUM CORP.
Author: Luke Geiver Managing Editor, The Bakken magazine lgeiver@bbiinternational.com 701-738-4944
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MAKING IT
SAND MOVEMENTS: During the screening process, frack sand is screened and then moved to storage for shipping.
True Grit with Preferred Sands By Chris Hanson
Photos by PREFERRED SANDS LLC
24
The BAKKEN MAGAZINE MAY 2013
With access to 320 million tons of sand, an annual 6-million-ton capacity and plants located in four states and Canada, Preferred Sands LLC is just one of the business leaders making the Bakken a success story. For half a decade, owneroperated Preferred Sands has been sending its brand of frack sand to the Bakken oilfields from Wisconsin. Once mined, Preferred Sands’ frack sand is first sent to a wet plant for washing and rough sizing and then to a processing facility for finish sizing before being stored until
shipping day. The most desired sands are those comprised of large, spherically shaped, pure quartz grains that will resist crushing in the frack process, CEO Michael O’Neill explains. O’Neill says doing business in the Bakken area presents significant logistical challenges. He points out that embargoes can suspend sand shipments from reaching the destination and, inside the Bakken region, the lack of rail infrastructure, road and weight restrictions also present logistical issues. O’Neill says the most efficient method to ship frack sand to the Bakken
MAKING IT
FIVE AND COUNTING: With five railroad companies currently moving frack sand, along with a pipeline, the company is meeting the demand of horizontal drilling clients.
DISTRIBUTION CAPACITY: Preferred Sands has clients spread across North America and Canada.
is through rail. Preferred Sands has six, strategically located facilities to deliver the sand via trucks. Preferred Sands is best known for its supply pipeline and resin-coated sand products and services, O’Neill says. The company's full-service distribution system for bulk proppant is available to a range of industry suppliers. Its goal is to minimize shipping costs in order to address a fractured supply chain that leads to inefficiencies and additional fees, he says. Through its supply pipeline, Preferred Sands distributes its products to every subbasin in the U.S. and Canada. The pipeline is served by more than 4,000 privately owned rail cars that are transported by Union Pacific, Burlington Northern Santa Fe, Norfolk Southern, Canadian Pacific Railway and Canadian National railroad companies. Preferred Sands’ resin-
coated sands (RCS) product line, developed in conjunction with Dow Chemical, uses the first, nonphenolic, resin-coating technology designed for proppants used in hydraulic fracturing. Proppant is the industry term for the sand, gravel, or particles of other material suspended in drilling fluid during formation fracturing to keep (prop) open the cracks in the rock when the fluid is withdrawn. The innovative coating process allows for coated sand to be produced using less energy while minimizing environmental impact compared to phenolic resins. O’Neill says the technology performs under a range of conditions and depths, is cost-effective and makes the drilling process more sustainable, than the traditional phenolic-based resin. The technology is currently implemented in the company’s RCS Garnet and RCS Pearl product lines.
DISTINGUISHED PRODUCT: In conjunction with Dow Chemical, the company has developed a resin coating technology for its sand products intended for hydraulic fracturing.
RCS Garnet was designed specifically for flowback control in low temperatures with a built-in activator that does not require an additional chemical treatment, while RCS Pearl has better bond strength and flowback protection in hotter and deeper wells. Preferred Sands, headquartered in Radnor, Pa., is one of North America’s largest manufacturers and providers of frac
sand. In addition to Wisconsin, the company has plants in Arizona, Minnesota, Nebraska and Canada. Preferred’s Flin Flon, Manitoba, location is one of the longest-running frack sand plants in North America. Author: Chris Hanson Staff Writer, The Bakken magazine 701-738-4970 chanson@bbiinternational.com
THEBAKKEN.COM
25
INNOVATORS
Technology Above Ground Innovative technology in the Bakken isn’t limited to below ground activity and the thousands of miles of horizontally drilled laterals. Bill Biewenga has proof. As the chief operating officer for Rhode Islandbased Qv21 Technologies LLC, Biewenga has helped integrate a fleet-tracking software package into the region that has streamlined the logistics management industry, and, more importantly, he says, cut down on the use of paper used for recording keeping. Every time a truck enters or leaves a well site, water depot, wastewater site, storage facility or any other destination where a resource such as water, oil or frack sand is loaded or unloaded, a paper ticket is generated. Each ticket includes handwritten notes along with information explaining the volume and type of load that any entity involved with that particular load will then have to record for resource management and budgeting. Those tickets may rest on a driver’s dashboard for a day, a week or a month. “When the tickets come in,” Biewenga says, “someone has to decipher what the tickets say even when somebody had to write them in below-zero weather.” In some cases, driving operations may create 8,000 to 10,000 tickets per month. 26
LET IT FLOW: The flexible hose offers better water flow properties than rigid pipe. PHOTO: HOSE SOLUTIONS INC.
The Qv21 Technology team knew their efforts to create a hardware and software package that could wirelessly track drivers and reduce the use of paper tickets by the creation of e-tickets were a worthy cause from the beginning. But learning that some operations in the region had tasked individuals with the sole job of eliminating paper tickets didn’t hurt either, he says. Since it first entered the play roughly one year ago, the team has outfitted thousands of trucks in the Bakken with
The BAKKEN MAGAZINE MAY 2013
its wireless, electronic onboard monitoring software and hardware package equipped with its trademarked LogisticsFramework system. The hardware can be housed in any Android operating system, and the software can provide logistics managers with real-time information of the driver’s hours, mileage and load information. The use of paper has been drastically reduced and logistics managers can focus on troubleshooting instead of mundane tasks, he says. And, that might not even be the most important facet of
the technology, according to Biewenga. “Every load has a value, and every truck carries a load of data. That data has a value as well.” Because some trucking operations engage in factoring, a practice that allows the company to expand by borrowing against its accounts receivable, having data quicker is important. The sooner data can be entered, the sooner a company can provide loan officers with the information needed to borrow, based on what their accounts of the future can prove.
INNOVATORS
BY THE FOOT: The flexible hose is sold by the foot but, in the Bakken, companies request it by the mile. PHOTO: HOSE SOLUTIONS INC.
SERIOUS TESTING: The Sionix team has tested some of the dirtiest liquid produced in the region at its facility near Dickinson. PHOTO: SIONIX CORP.
Logistics software housed in a smartphone isn’t the only proof that innovation is everywhere in the Bakken. The companies of Hose Solutions Inc. and Sionix Corp. are both developing a presence in the Bakken with their water-based technologies. Hose Solutions Inc., an Arizona-based hose designer and manufacturer, is now providing clients in the region with a polyurethane hose as strong as rigid pipe but as flexible as normal hose. The product can help move water from a water depot to a well site while cutting down on labor costs and planning time. The hose can be maneuvered around culverts, roads or other obstacles, and according to Tanner Tryon, company general manager, the product has been used in nearly every
oilfield in the country. “We have a high demand for the product,” he says, “but we are short on supply.” Sionix Corp., an L.A.based firm that recently relocated to Houston, is perfecting a wastewater treatment process that will allow for the recycling of water used in the drilling process. The firm has finished testing at a facility adjacent to a water depot near Dickinson, N.D. An independent watertesting service has verified the results of the dissolved air flotation technology developed by Sionix. “We didn’t want to do this on test water, we wanted to do this on the real thing,” says Ken Calligar, CEO. Henry Sullivan, independent director of the company, says the idea of Sionix’s treat-
DRIVING DATA: The wireless, onboard, Android-based tracking system allows logistics managers to track driver miles, routes and loads. PHOTO: QV21 TECHNOLOGY
ment process is simple. Drilling teams that normally pay to dispose of wastewater should be able to recycle that water instead, and use it again. “We aren’t asking people to be environmental heroes, we are asking
people to save money,” Sullivan says. But, he adds, the process does provide an immense environmental benefit to those who use the process.
THEBAKKEN.COM
27
PLANNING
CONTRIBUTION
Helping Oil-Impacted Cities Grow Responsibly Regional planning moves forward with water needs topping the list. By Heather Syverson Photos by AE2S
Over the past five years, western North Dakota has both benefited from and suffered because of the oil activity associated with the Bakken shale formation. On one hand, there’s the thriving economy and nearly nonexistent unemployment. On the other hand, cities’ limited and aging infrastructures are being taxed because of the sudden influx of people who want to live and work in the Bakken. The staff of Advanced Engineering and Environmental Services Inc. (AE2S), a regional engineering consulting firm, is helping
several towns in western North Dakota manage the sudden growth. “Many of the cities in the Bakken area of North Dakota have an immediate need for planning, updating and expanding their water and wastewater systems, and financing the growth of their cities,” AE2S CEO Steve Burian says. Historically, one of the major problems in western North Dakota has been an inadequate and poor-quality water supply and the booming population has made the situation even more critical. The Western Area Water Supply Project was born out of this need. The
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of The Bakken magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
28
The BAKKEN MAGAZINE MAY 2013
$350 million WAWSP will serve all, or parts of, Burke, Divide, McKenzie, Mountrail and Williams counties by treating Missouri River water at the Williston Regional Water Treatment Plant, before transporting it through hundreds of miles of pipe to the towns and rural areas in the five-county area that desperately need water. In 2011, N.D. Gov. Jack Dalrymple recognized the immediate need for the WAWSP, and signed House Bill 1206 to authorize $110 million dollars in state loans to get the project started. The loans will be repaid primarily through the sale of water from extra capacity in the system at water-fill depots and pipeline laterals to oil companies for the hydraulic fracturing process.
PLANNING
The WAWSP is currently on track to be the fastest regional water system to be built in North Dakota history. AE2S Project Manager Cory Chorne says, “Without this project, towns like Watford City and Crosby would be suffering from water shortages and poor quality drinking water well into the future. The WAWSP is truly a historic water project for the state.” By midyear, nine cities will receive service from the WAWSP. Several more towns will come online over the next couple of years as the system expands to more rural areas. AE2S is planning and designing the project for the Western Area Water Supply Authority, and is also contracted to design upgrades for the Williston Regional Water Treatment Plant to increase its capacity. The population of the project’s service area is now projected to reach 100,000 residents by the year 2032, according to a North Dakota
WATER QUEUE: Oil company trucks line up at the Western Area Water Supply Authority’s industrial water depot in Watford City, N.D. The sale of water to oil companies for use in the hydraulic fracturing process will pay for the majority of the Western Area Water Supply Project’s construction.
State University housing study covering western North Dakota. This is more than double the original population projection of 48,000 that was in place when project planning began two years ago. As population projections increase, the project’s designers have adjusted the WAWSP to accommodate the growth.
Coordinating 19 Counties
EXPANDING WATER SUPPLIES: Construction crews install miles of pipeline for the Western Area Water Supply Project, which will deliver high-quality drinking water to Burke, Divide, McKenzie, Mountrail and Williams counties in northwestern North Dakota.
Population projections play a major role in another project that AE2S is working on in western North Dakota. The Vision West ND project is a local and regional planning effort to address short- and long-term needs to meet growth challenges and establish diversified economies in the 19 western North Dakota counties affected by oil and gas production: Adams, Billings, Bottineau, Bowman, Burke, Divide, Dunn, Golden Valley, Hettinger, McHenry, McKenzie, McLean, Mercer, Mountrail, Renville, Slope, Stark, Ward and Williams. The U.S. Department of Housing and Urban Development and the North Dakota departments of Trust Lands and Commerce are funding the project. “Basically, Vision West ND is a regionwide effort to assess the current and nearfuture needs of participating cities, while gathering input from city leaders and citizens at public meetings,” says Andrea Boe, AE2S marketing manager and communications officer for Vision West ND. “We’ve had excellent participation from the 19 associated counties. Over 1,000 people have participated in
leadership and town hall meetings to provide input and guidance in developing their community economic strategic plans. This project will improve the entire region by coordinating the efforts of the individual communities on a larger scale.” As part of the project, AE2S completed municipal infrastructure assessments to create an inventory of water, wastewater, storm water and street infrastructure. The assessments help identify cities’ immediate and future needs, prioritize the necessary improvement projects and project the associated costs. By the end of this year, Vision West ND will provide a complete regional plan incorporating the strategies from the local participants. Implementation is to begin in 2014. Planning ahead has been the key to overcoming many of the hurdles brought on by the oil boom in western North Dakota. “AE2S has had offices on the western side of the state for many years, long before many other companies arrived because of the activity in the Bakken,” Burian says. “I’m very pleased that we’ve been able to make a positive impact in North Dakota, and I look forward to finding more ways to help meet infrastructure needs in western North Dakota.” Author: Heather Syverson Communications Coordinator Advanced Engineering and Environmental Services Inc. (AE2S) Heather.Syverson@AE2S.com 701-364-9111
THEBAKKEN.COM
29
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