The first account of Montana crude was in 1864 when an emigrant wagon train used naturally exposed crude to grease their wagon wheels near the Big Horn River.
The state’s first oil well was drilled by Butte Oil Co. in 1901 near Kintla Lake which is now within Glacier National Park. According to a historical overview of mining in Montana compiled by the U.S. Forest Service, American Indians and fur trappers knew about oil seeps in that area and early-day prospectors wondered about the potential for oil when bear hides sold at Tobacco Plains smelled of kerosene.
In the early 1900’s prospectors fled to Montana to take advantage of its natural resources: ample pastures, clean waters and an abundant mineral wealth that was increasing in demand: petroleum.
In 1916, according to the figures from the United States Geological Survey, the annual oil output from the Elk Basin Field was 44,917 barrels and in 1917 the output increased to 99,399 barrels.
In 1922 oil was discovered in the Kevin-Sunburst oil fields in Montana. This marked the birth of a crude oil industry in Montana. Two years later a small refinery opened to process crude oil from those early wells. Texaco acquired the refinery in 1928 and became known for producing leaded gasoline during and after World War II, author Don Douma noted in the Montana Magazine of History.
Many successful fields were developed in the decades to follow proving Montana to be worthy of development and proving Montana would stand tall as an oil producing state.
Oil was first found in the Williston Basin along the Cedar Creek Anticline in southeastern Montana in the 1920s, and in the 1930s between Baker and Glendive.
Between 1924 and 1951 there were close to two dozen attempts at drilling about 40 miles east of Williston, N.D. Finally, in 1951 the Clarence Iverson Farm well, (south of Tioga, N.D.) struck oil. This was the first major discovery well in the continental U.S. since WWII and became one of the biggest onshore oil finds: the Bakken Formation. This formation was soon found to cover part of Montana, North Dakota and Canada.
In 1953, when oil was ‘cheaper than dirt,’ a Montana farmer by the name of Henry Bakken told a geologist who wanted to drill for oil on his farm… “Sure, be my guest!” Henry didn’t know he was sitting on what is known as “an ocean of oil” and is now known as “The Bakken Formation,” named after Henry Bakken himself.
In July 1965 the initial oil discovery well, No. 1 George Hunter, was drilled in the Fairview field by Southern Union Production Company and Consolidated Oil and Gas, Inc. The second discovery well, the No. 1-A Vanderhoof, was in the North Fairview field and was drilled by Superior oil and Consolidated Oil and Gas, Inc.
In 1968, at the western edge of Richland County’s Sidney-Brorson Field, Miami Oil Producers drilled what appeared to be the largest producer completed in the field: the No. 1 Dynneson. Nine miles northeast of the Dynneson hit, Consolidated Oil and Gas made a discovery when it hit it’s Young Heirs in the Fairview Field. Also in 1968, the oil well located on the Loren Young farm about six and a half miles from Fairview, MT was rated as a producing well. During this time, the Fairview Pipe Line Company planned to build a six-inch main pipeline to join with Butte Pipe Line Company’s facilities southwest of the Fairview Field.
In 1969 Target Oil Company out of Denver announced plans to drill a series of 20 wildcat wells, six of those wells were in southeastern Richland County, five in Wibaux County and the drilling of the remaining wells was expected to take place in North Dakota. These wells were the first phase of an exploration program on 90,000 acres of land held by Target Oil in the area.
The first commercial Bakken well at Elm Coulee, located in Richland County, Montana, was completed in 1981 by Coastal Oil and Gas. The largest Bakken oil production comes from the Elm Coulee Field, where extraction began in 2000.
In 2005, the Elm Coulee field accounted for almost half of the state of Montana’s production of oil.
In 2007, shale oil from Elm Coulee averaged 53,000 barrels per day (bpd) – more than the entire state of Montana a few years earlier.
A few Montana facts:
It is the birthplace of horizontal drilling in the Bakken at the Elm Coulee Oil Field.
It is home to the Bakken’s only oil and tax holiday.
It is the place that led Harold Hamm, CEO of Continental Resources, to say “…that’s what made it work here in Montana (Bakken oil production) and the environment that was created, the business friendly environment. That’s why we mapped and started here.”
It’s the host of the 5th best cost of labor (Business Facilities, 2011)
It’s the 8th best business tax climate in the nation (Tax Foundation 2012).
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