Richard "Dick" Findley, a veteran wildcat geologist in Billings, Mont., is an unlikely character to debunk Canada's long-held belief that all the big, light-oil pools in the Western basin had been found.
Yet that was the outcome of his re-discovery of the vast Bakken oil play just south of the Canada-U.S. border, beneath large parts of Montana and North Dakota, long after large oil companies had given up on it because they thought of it as a poor producer.
Thanks to new technology that made it possible to squeeze oil out of old rock, the Bakken has become so prolific in the United States it's one of the top onshore fields found in the past half-century.
On the Canadian side, where the formation straddles a big portion of southeastern Saskatchewan and the southwestern edge of Manitoba, companies that imported Mr. Findley's views during the past three years have been well-rewarded.
The Bakken is shaping up to be the largest light-oil pool discovered in Western Canada since 1957, holding at least one billion barrels of oil, of which up to a quarter is recoverable.
"The guy that deserves all the credit is technology," Mr. Findley said in an interview. "If I had a contribution, it's maybe to get people to re-think things. When you take off the blinders and think big, you start to see pretty big regional accumulations of oil. If geologists think big, they will be able to find some bigger things."
Already, the formation is yielding about 12,100 barrels a day on the Canadian side -- 4,000 barrels a day in Saskatchewan and 8,100 barrels a day in Manitoba from about 520 wells, according to Canadian Discovery Ltd., a Calgary-based firm that tracks Canadian exploration activity.
"For a light oil play, the Bakken is probably the top play in Western Canada," said Rick Morgan, exploration analyst at Canadian Discovery. "People have started comparing it to the Pembina Cardium, the largest oil pool developed in Western Canada."
Big oil companies, both in Canada and the United States, have stopped exploring for light oil onshore, focusing instead on big unconventional sources such as the oilsands or natural gas resource plays that can produce huge quantities. Many have gone overseas.
But exploration for light oil in the Western sedimentary basin is making a comeback among smaller players, emboldened by strong oil prices.
In Saskatchewan, the play is dominated by Mission Oil & Gas Inc. (taken over last month by Crescent Point Energy Trust for $760-million). Other operators are Tundra Oil & Gas Ltd., Innova Exploration Ltd., Athena Resources Ltd., Advantage Oil & Gas Ltd., Grand Banks Energy Corp., WaveForm Energy Ltd. and Magnus Energy Inc.
In Manitoba, the dominant player is Tundra, the private oil company owned by the Richardson family of Winnipeg through James Richardson & Sons, Ltd. Other Manitoba operators are Rideau Petroleums Ltd., Kiwi Resources Ltd., Grand Banks and Cosens Drilling Ltd.
At least one Canadian company is a significant operator on the U.S. side. Enerplus Resources Fund last year paid $500-million for the U.S. private company that developed Mr. Findley's idea, Dallas-based Lyco Energy Corp., and followed up with the acquisition of privately owned Sleeping Giant LLC for $107.2-million, which owned additional working interests in the field.
The Bakken, located in the Williston Basin, has been known to oilmen in both Canada and the United States since the 1950s. But its production back then was minor and it was eventually forgotten.
Then, in 1995, Mr. Findley, owner of Prospector Oil Co., a two-staff independent geology company that for many years had struggled to survive (its business was to generate ideas and sell them to industry), drilled into the silt stone that sits right below the oil-bearing shale, called "the middle member."
Mr. Findley initially targeted a deeper objective, below the Bakken.
"When we were drilling through the middle member, we encountered a drilling break, which indicated it had storage capacity and we had a large gas show. And so that got me thinking that the oil is not in the upper shale, it's focused in the middle member. It was kind of a new idea about where the oil was in the Bakken."
He sold the idea to Lyco, a small private Dallas-based oil company, while keeping an overriding royalty.
But oil prices were low at the time, and Lyco looked for ways to get it out of the ground economically.
It brought in Halliburton Co., the Houston-based energy services giant, to help it come up with solutions.
"That is when we started thinking about the horizontal drilling and the fracture stimulation of the horizontal well bore, and that is really new technology," Mr. Findley said.
Horizontal drilling involves pushing a drill bit vertically through the earth's crust for part of the way, then directing it horizontally to capture more of an oil pool. Fracture stimulation involves injecting sand-laden fluids at high pressure to fracture the rock and make it more permeable.
"I identified the large regional accumulation, but it really was a team effort," Mr. Findley said. "Everybody had their own expertise and put it together to figure out how to make it economic. To be able to frac a horizontal well bore was new technology and it's what made it work."
The Bakken now produces, in Montana alone, about 50,000 barrels a day.
The success was closely watched on the Canadian side, by companies such as Mission.
"We saw what was going on in Montana and looked at Southeast Saskatchewan and recognized there was a similar-looking reservoir, albeit at a much shallower depth," said Trent Yanko, CEO of Mission.
"We basically levered off that learning curve and we got going and had good success right from the beginning."
The technology had to be adapted to the Canadian formation, which is not as deep as in the U.S., but "we had good success early on," he said.
Mr. Yanko said discovery of the Bakken in Saskatchewan two years ago, by Mission and Bison Resources Ltd., a junior company it took over, rekindled oil production in a mature region.
The activity is drawing people back to the community.
The play is centred near Stoughton, a 700-resident farming town known for sitting at the end of the second-longest straight line of rail in the world. This summer, the company was employing 300 people in drilling and facilities' construction.
Before the find, "People were leaving to find jobs. Now they are coming back and they are actually selling houses in Stoughton again, not in a large way, but significant for the size of town," Mr. Yanko said.
Scott Saxberg, CEO of Crescent Point, an oil-focused trust, expects his company's volumes from the Bakken following the Mission integration to double or even triple in the next three to five years, from about 4,000 barrels a day.
"It's unique in that it's light oil, and in our backyard, and it's low cost," he said.
He said it's costing his company $5 to produce a barrel of oil from the Bakken, a bargain next to the costs of oilsands production, which can be multiples of that amount, depending on the project.
The play also benefits from being located in Saskatchewan, where the provincial government has implemented a royalty regime that is seen as being even more favourable than Alberta's to stimulate oil investment, and where the economy is not as overheated.
Still, Mr. Saxberg acknowledges that larger companies remain skeptical.
The play is still in its infancy, and "there's an attitude in Alberta that Saskatchewan is where companies start, and then they move to Alberta," Mr. Saxberg said. "And so the Alberta companies tend to look down on Saskatchewan as a place to make money."
On the Manitoba side, the field is centred around the town of Sinclair, near the Saskatchewan border, and is a bit different there. Some of the production comes from another zone called Torquay, which is in contact with the Bakken in certain places, Mr. Morgan said.
There has been so much drilling there, primarily by Tundra, that oil and gas activity in Manitoba is at a record high.
Tundra, a long-time oil producer in the province, started tapping the Bakken in 2003 and uses both horizontal and vertical drilling techniques.
President Roland Moberg didn't want to talk about his firm's activities, saying the company is private.
To be sure, the Bakken is junior in status next to big projects in the Athabasca oilsands, which are collectively producing one million barrels a day, growing to an expected 3.5-million in the next decade.
Indeed, there are wells in the Middle East and other areas of the world that are producing from one well the same amount as the Bakken is yielding in all of Canada.
But if it turns out to resemble the Pembina Cardium, current activity in the Bakken is just scratching the surface.
After 50 years of drilling, the Pembina Cardium, near Edmonton, has produced about 1.2 billion barrels from about 6,000 wells, about 4,000 of which still produce. It has estimated reserves of 7.8 billion barrels of oil in place, with about 1.6 billion barrels of that recoverable.
The Bakken will likely require thousands of wells to be exploited effectively, Mr. Morgan said, but the potential is vast and the boundaries have yet to be established.
OIL FIELDS OF DREAMS:
GHAWAR, SAUDI ARABIA
4.5 million barrels of daily production
55 billion barrels of cumulative production
125 billion barrels available for recovery
PRUDHOE BAY, ALASKA
25 billion barrels total (estimated)
10 billion already produced
13 billion classified as recoverable with current technology
OIL SANDS, ALBERTA
973 million barrels per day
1.6 trillion barrels (initial volume)
315 trillion barrels (ultimate potential)
PEMBINA CARDIUM, ALBERTA
1.2 billion barrels produced (estimated)
7.8 billion barrels of estimated reserves
1.6 billion barrels recoverable.
Source: Government of Alberta, Columbia University, EIA
all figures 2004 estimates