The Williston Basin that western North Dakota and eastern Montana was kick-started in 1951 by Amerada Hess Corp. Since then, the venerable Williston has witnessed ups and downs more severe than most drilling areas. The U.S. drilling boom of the late 1970s and early 1980s caused the local rig count to peak at 119 rigs in 1981. But the disastrously low oil prices of 1998 forced newspapers to report that in one dark week, not a single rig was found drilling in all of North Dakota-the first time that had happened in nearly 50 years. We first reported on the Williston Basin in August 1981, the debut issue of Oil and Gas Investor. At that time, I was a cub reporter for the daily newspaper in the small city of Williston, an agricultural town surrounded by wheat fields and sunflowers. The people struggled economically-and culturally-to handle the influx of new workers arriving from Texas and other producing states in the South. Yet the city council was happy to use the increase in sales tax receipts and severance taxes to fund a new library and ice skating rink as well. In 1981, we could see the derricks of a dozen rigs from the bridge that spans the river south of Williston. Yet the boom turned to bust by the mid-1980s. Geologists and drillers fled back to warmer climes when the price of oil fell below $15 a barrel. Some oil-patch veterans, transferred back to Midland, Denver or Houston, waited two or three years before they could sell the modest homes they had bought in Williston. Finding and lifting costs in this basin have always been fairly expensive, partly due to the fact that many of the wells produce a large amount of water that must be disposed of in a benign way. What's more, because of the nature and quality of the crudes and their distance from market, wellhead prices are anywhere from $2 to $4 less per barrel than West Texas Intermediate. Fortunately, the Williston's many pay zones help offset these problems somewhat. The Mississippian Lodgepole, Ratcliffe and Nesson, the Devonian Bakken and Duperow, and the deeper Ordovician Red River still offer operators several chances to hit pay dirt. Horizontal drilling technology first gained commercial viability in the U.S. between 1985 and 1990. It helped turn the Williston around. Burlington Resources subsidiary Meridian Oil Inc., Union Pacific Resources and Oryx Energy were early leaders in this new technique, which still plays an enormous role in North Dakota today. Meridian drilled the first Bakken horizontal in 1987. This play made our cover in June 1990. The September 1990 issue of Oil and Gas Investor noted that as of May 1990, Texas and North Dakota led the nation in the number of horizontal wells drilled to date-that is, since the company formerly known as Petroleum Information Corp. began tracking horizontal rig counts for the first time. PI said at that time, operators had drilled some 54 lateral wells in North Dakota's Bakken Shale, surpassed only by the 188 wells drilled in Texas' red-hot Austin Chalk horizontal play. The overpressured Bakken caused a brief stir, competing with the Austin Chalk for prominence. The problem was, operators soon learned that horizontal drilling in a thin, fractured shale that is likely to crumble is no easy task-the hole is harder to stabilize. We wrote then, "Offsetting existing production proved successful in the shaley play, but [horizontal] exploratory attempts failed to score." Still, in 1999 in Divide County, Burlington established the first horizontal Duperow production in the basin, proving that operators never give up trying new applications. The Williston Basin enjoyed another boost when the Lodgepole play was ignited by Conoco in 1993. Initial successes meant leases were going for $1,000 per acre (versus only $25 to $50 today). This time, the basin was being helped by another new technology, 3-D seismic, which was just beginning to gain widespread use at that time. Operators were able to find small mounds or reefs holding 1- to 5 million barrels of oil, on up to mounds containing as much as 30 million barrels of oil. Most of the Lodgepole activity took place in a small area around the town of Dickinson, which is ringed by reefs still being explored by Armstrong Operating Co., a longtime local player, and Duncan Oil of Denver. The star in this area was-and still is-the Eland Field, which has an estimated 80 million barrels of oil in place. Eland has produced more than 13 million barrels of oil since it was discovered in 1994. Today North Dakota activity, mostly workovers and development drilling, is making a comeback. Through June 30, 2000, operators had filed 86 permits to drill, versus 37 last year at that time. They had completed 56 wells, says IHS Energy Group, the new parent company of Petroleum Information. Two companies have recently made significant acquisitions in the Williston Basin: New York-based Belco Oil & Gas Corp. and Fort Worth-based Encore Acquisition Partners. At press time, Belco had two rigs drilling horizontal wells targeting the Mission Canyon in Dunn and Billings counties. It and predecessor companies have played the Williston since the 1950s. How do the economics look today? Estimated costs through completion are about $1.3 million. If these wells tested at the rate of 200 barrels of oil and 400,00 cubic feet of gas per day, and if we assume a price of $20 per barrel and $1.75 per thousand cubic feet, the rate of return on a 640-acre unit would be an estimated 39%. This assumes lease operating costs of about $5,000 per month, according to filings Belco made with the North Dakota Industrial Commission, says the Rocky Mountain Oil Journal. In February 2000, Belco acquired interests in four units of the prolific Lodgepole Field in Stark County for $40 million. "It was a cash flow, rate-of-return deal," says Belco president Grant Henderson. "This is a very efficient reservoir where we'll recover about 50% of the oil in place. We'll just produce what we have. We booked zero reserves outside of the proved developed producing category." Some of the wells in the Lodgepole area make 1,000 barrels a day, but water must be injected to keep up the reservoir pressure. Lifting costs are well under $1 per barrel, making the play very economic. In December 1999, Belco tried its first horizontal in the thin Mission Canyon, where the drillbit must stay in a zone that may be only four to six feet thick. Initial production is about 250 barrels a day. Belco thinks it could have 50 more locations in this play, with more laterals drilled by year-end. Burlington and Amerada also are trying laterals in this formation. Shell Oil drilled its first horizontal success in the Mission Canyon on the 60-mile-long Cedar Creek Anticline in nearby Fallon County, Montana, in 1995. It discovered the anticline more than 40 years ago and estimates it may hold 2 billion barrels of oil. Only 400 million have been recovered so far. That's why startup Encore, headed by oil-patch veteran chief executive Jon Brumley, acquired six fields from five sellers on the Cedar Creek Anticline for $165- to $200 million in 1999. It now operates 460 wells producing about 13,500 barrels a day. "There is a lot of upside left. We're studying a CO2 flood now, and changing the waterflood pattern," says Brumley. Encore has two drill rigs and five workover rigs running now, but will bump that up next year to four and seven, respectively, he adds. Recompletions using coiled tubing are part of the plan. "This is fun," he says. "Some of the fields that we didn't think had much upside have been a pleasant surprise for us." THE PACE OF CHANGE In April 1997, analysts at Howard, Weil, Labouisse, Friedrichs Inc., New Orleans, presented their annual report on reserves and finding costs for the public companies they cover, based on year-end 1996 data. Of the 70 companies mentioned that year, 24 no longer exist in 2000. They have disappeared via merger, acquisition or liquidation. Six have been renamed because of dramatic restructuring and/or a merger. Some of the missing names: American Exploration Co., which had 42 million barrels of oil equivalent of proved reserves; Flores & Rucks, with 75 million BOE; Monterey Resources, 218 million BOE; Sonat Exploration, 333 million BOE; and Union Texas Petroleum, which had 399 million BOE. Do you know who owns those reserves today?