The Bakken Formation
Discovered in Williston, North Dakota in 1953, It covers approximately 200,000 square miles (520,000 km2) between North Dakota, Montana, and Saskatchewan, Canada.
The Boom Towns
The little town of Williston has been part of all this oil
producing activity. It takes plenty of human resources to get that oil out of
the ground, and Williston’s population has exploded by at least 20,000 as a
result. This has turned into a Williston opportunity, and area residents have
profited from the discovery of black gold.
Property owners immediately saw rents triple in value and some people began to rent out rooms in their homes. Land owners became wealthy overnight. Williston restaurants have lines around the block; grocery stores stock up to capacity; and wholesale suppliers are scrambling to keep up with demand.
Enterprising residents turned it into a Williston opportunity by starting their own catering businesses to help feed the hungry oil workers. Homemade cakes, pies, sandwiches and packed meals are eagerly devoured by the exhausted men and women.
The Food and Housing Shortage
Many workers order certain foods over the Internet for
the convenience, as well as the inability of suppliers to get food to their
area. The sheer number of trucks carrying crude oil out of western North Dakota
has made it difficult for food suppliers to get in to towns like Williston and
Watford City as fast as they would like.
Providing food and housing to the workers has been a challenge for the major oil corporations in the Bakken region. Since many oil workers are nomads, they bring RVs with them, and Williston has had a problem accommodating them. They recently had to ban RVs within the city limits due to problems with RVs in store parking lots.
Some logistics companies have put up rows of trailers with one-room “apartments,” in "man camps' but temporary housing like this is far from luxurious.
A trailer park investor in Watford City found a Bakken opportunity by providing
indoor trailer stalls inside large buildings with a community room for
residents. The stalls offer warmth and privacy that other trailer parks cannot
Wal-Mart just started selling 10 x 6 foot cubes complete with flat screen TV’s, small refrigerators, and double bunk beds, but the asking price of $24,900 has proven too steep for the oil workers who aren’t looking for a long-term investment that doesn’t roll.
How the Oil is Extracted
Geological know-how located this prodigious source of natural gas
trapped between the Bakken’s shale deposits, but it can’t be reached by
conventional drilling. When oil companies first started drilling in the Bakken
around 2000, they averaged only about 2,000 barrels a day. However, when they
switched to horizontal drilling and hydraulic fracturing of the rock in 2010,
the wells produced over 260,000 barrels of crude oil.
In 2011, those figures doubled, and oil production was up to 445,000 barrels per day. In 2012, those numbers rose to 600,000 barrels per day. Projections by the U.S. Energy Information Administration predict that oil production will continue here some time. Development in the area should last about twenty years.
How directional drilling works
How to Make the Bakken Opportunity Work for You
Investing in Bakken real estate that could be
turned into rental units, rooms, a Bed & Breakfast, boarding house, and/or a restaurant or catering business could be lucrative. However, real estate prices have inflated, so finding a bargain is tough. A fixer-upper would be your best bet.
Good catering trucks are in demand, but you should plan on bringing
your own accommodations if you are re-locating close to Williston. Motel rooms are very expensive due to the demand. You might think about opening a franchise near Williston. Convenience stores, fast food, DVD rentals, computer and cell phone/electronics retail and repair, and tobacco stores would be a good investment. However, finding the retail space will be a challenge.
If you make a small investment and bring your business or commodity to the work camps with a van or truck, you should be kept busy and profitable for quite a few years. The workers are looking for smartphones, entertainment, the electronic devices that deliver it, food and refreshments, and ways to keep their devices working.
Since the workers’ accommodations are somewhat sparse, posters,
rugs, body pillows, foam mattress pads, extra pillows, blankets and slippers would be immediate buys. Of course, genuine brand name work boots are always in demand, along with authentic athletic shoes, T-shirts and work
Since North Dakota now has a $1 billon budget surplus, they will
probably be funneling a lot of that money into their educational system.
Teachers, school counselors and other educational professionals may find North Dakota a good place to settle down. While other states have been forced to lay off teachers due to budget shortages, North Dakota is likely to begin adding more schools and more jobs in the next few years.
The discovery of a sustainable energy source in North Dakota has been great news for Americans. It is doubtful the Bakken shale deposits will completely break dependency on foreign oil, but it will greatly add to U.S. oil reserves.
Many of the region's residents and other entrepreneurs have found ways to profit during tough economic times. When so many states are struggling to balance their budget, it's amazing to see a natural resource benefit North Dakota and the