1. Western North Dakota Energy Project Shale Projection Webinar Series 2014 Regional Updates An Initiative of the Strom Center at Dickinson State University

2. Acknowledgments Our Analysts: Lynn Helms, ND Dept of Mineral Resources Justin Kringstad, ND Pipeline Authority Dean Bangsund & Dr. Nancy Hodur, NDSU Our Funders: Bush Foundation Vision West ND US Dept. of HUD Regional Sustainability Planning Grant Our Moderators: Dr. Dick Gardner Senior Fellow, RUPRI Center for Rural Entrepreneurship Our Local Host & Coordinator: Deb Nelson, DLN Consulting

3. Lynn Helms’ Optimistic Scenario Imagine a cone with the deepest part centered under McKenzie County with 5 pay zones… Units on outer rings of cone have fewer economic pay zones & thus fewer wells Spacing UnitsWells per UnitTotal Wells 1,0001919,000 1,0001515,000 2,0001122,000 2,000714,000 2,0002 4,000 8,00074,000

4. Source, Lynn Helms, ND Division of Mineral Resources Typical Well costs $8.7 Million Over 45 years: Produces 600,000 Barrels Generates $20 M in net profit Pays $4,925,000 in total taxes Pays $7.6 M in royalties Pays Salaries of $2.1 M Pays operating expenses of $2.4 M

5. Boom Duration: When will drilling & production begin to taper?

6. Total Producing Wells

7. Western North Dakota Well Projections 1,800 - 3,000 wells/year = 2,000 expected  150-250 rigs = 12,000 – 30,000 jobs  Another 10,000-15,000 jobs building infrastructure  10 wells/rig/yr increasing to 12 by 2015  200 rigs can drill the wells needed to develop spacing units in 18 years  35,000-40,000 more new wells  Recoverable oil = 7.5 Bbl USGS w 3ThreeForks 2,300 – 2,900 wells/year = 2,500 expected  ~180 rigs = 20-25,000 jobs  Another 3,400 jobs building gathering systems  12.4 wells/rig/yr increasing to 14.1 by 2022  May take over 25 years to fully develop the 8,000 spacing units  45,000 – 74,000 total Bakken wells  Recoverable oil =10-14 Bbl Helms, 32-36 Bbl Continental Oil 2013 2014

8. North Dakota State University Model Consistent with Helms/Kringstad assumptions Rapidly changing technology & other variables led NDSU away from trad I/O models and into uncharted territory Most likely or medium, pessimistic or low, & optimistic or high scenarios Splits jobs into permanent vs transient Is more accurate at regional level Communities can affect the local distribution of opportunities, impacts, risks, and growth.

19. Average Annual Population & Housing Growth (most likely) Minot Region Dickinson Region Williston Region Permanent Housing 2.6%7.0%11.5% Permanent Population 2.4%6.4%11.2%

20. Latest comprehensive projection of employment, housing, and pop Scenario of likely future; not precise prediction Last year’s medium scenario is this year’s low Taper doesn’t start until 2020-2030 (and then only levels off) Bakken in dynamic state of flux; projections, if to be used to continue planning, should be revised regularly Conclusions

21. If you have further questions, please contact: Deb Nelson, DLN Consulting (701) 483-2801, deb@dlnconsulting.comdeb@dlnconsulting.com Dick Gardner, CRE & Bootstrap Solutions (208) 859-8878, Bootstrap1@msn.comBootstrap1@msn.com www.visionwestnd.com/webinars.php www.ndwebinars.com