The North Dakota Bakken has helped revive the United S. energy industry, driving the nation's crude production to its highest level since 1989. Yet there could be a bigger play, even larger than the Bakken, sitting right below it.

Even bigger than the Bakken
The Bakken has been one of America's biggest shale finds in history. In July, output from the formation hit a record 810,000 barrels per day, up from less than 80,000 barrels per day during the same month five years earlier. 

But based on the latest findings from United States Geological Survey, the Three Forks formation could hold more oil than the Bakken shale that lies above it. According to USGS estimates, the Bakken contains 3.65 billion barrels of undiscovered, technically recoverable oil. That's slightly short of the Three Forks' 3.73 billion barrel estimate. 

The new report also triples the estimated quantity of undiscovered, technically recoverable gas and natural gas liquids, or NGLs, in the Williston Basin. The USGS projects that the combined Bakken and Three Forks contains 6,726 billion cubic feet of natural gas and 527 million barrels of NGLs. These estimates are conservative and could be increased as technology improves.

Of course, industry operators have provided a more optimistic assessment. 'What [the Bakken] looks like in terms of recovery factor and recoverable reserves was about 24 billion barrels of oil.' Rick Bott, President and Chief Operating Officer at Continental Resources (CLR), told analysts on Thursday, 'But if you add the deep benches and depending on what recovery rates you use, those deeper benches could move the amount of oil in play to 32 billion to 45 billion barrels of oil. So that's an exciting number to be going after.' 

Who's best positioned
Unsurprisingly, established operators in the Williston Basin are the best positioned to exploit the Three Forks. 

Continental Resources has been the most aggressive in trying to prove up its acreage. The company's Three Forks exploration program is on target to complete 20 new wells by year-end to establish the formation's productive capacity, identify unique reserves, and de-risk leaseholds.

Year-to-date the company has completed 14 wells in the Three Forks with average initial production rates between 970 and 1,200 barrels of oil equivalent per day, or BOE/d. That compares to initial production rates in the upper Bakken layer of around 1,150 BOE/d per well during the second quarter. 

Other companies have posted encouraging exploration results from the Three Forks formation as well. Last quarter Kodiak Oil and Gas (NYSE: KOG) completed six test wells with initial production rates between 1,204 to 3,482 BOE/d. While the early results are encouraging, management cautioned that more testing is needed to ensure the commercial viability of the play. 

Newfield Exploration (NFX) continues to study and test the Three Forks, including its lower benches. During the second quarter, the company drilled an additional Three Forks well which had an average initial production rate of 1,240 BOE/d and averaged 350 BOE/d over 90 days. 

As part of this effort, Newfield drilled all the way through the lowest parts of the Three Forks to determine the prospects of the lower benches. The company's geologists are reviewing this data now and results from this study are expected to be announced later this year. 

Foolish bottom line
Like the Bakken and Eagle Ford before it, expect the Three Forks to become a regular part of the industry's vocabulary soon. As these companies continue their exploration efforts and de-risk board swaths of acreage, shareholders should expect those recoverable reserve metrics to increase. That could serve as a hidden catalyst for share prices. 

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