WILLISTON, N.D. – Two days after a rosy government report doubled the estimate of how much oil is tucked beneath North Dakota, four men hop out of their vehicles into the soft dusk light atop a rock-strewn hill north of town.
They point at the barren, rolling landscape dotted with cattle, an oil well and a pond as a half-mile-long train of oil tank cars silently snakes past in the distance.
One is a former hedge fund manager who flew in from Connecticut. Another is a real estate investor who drove his pickup from Spokane, Wash. There’s a local civil engineer and a homebuilder who moved out here when business dried up on Michigan’s Upper Peninsula.
They’re planning to buy the 70 acres of farmland for a 56-home subdivision on one-acre lots, envisioning a bedroom community as the area’s oil boom reality of man camps and crowded RV parks morphs into something more permanent. “This new estimate tells people looking to invest here that, hey, there is enough oil to drill here for 20 years instead of five,” Williston Mayor Ward Koeser said. “Now there’s scientific proof that we have twice as much oil as they said five years ago, and that gives us a little more stability, reliability and credibility.”
It also adds what the mayor calls “stress on all aspects of government and huge challenges” — from sewage treatment to police staffing to the dearth of day care providers, affordable housing and retail options — for the nation’s fastest-growing city. Williston’s population has mushroomed from 12,500 people to nearly 40,000 in the area in just a few years.
But unlike the short-lived oil booms here in the 1950s and ’80s, the new estimates have eased underlying concerns of another bust, feeding a new sense of long-haul optimism in northwestern North Dakota. “We have growing pains, sure, but this shows the oil is here to stay and with all that opportunity, people are going to want to stay,” said Angela DeMars, who gave up her 10-year career as a Target executive in Minneapolis to return to Williston, where her father once owned Walt’s Grocery Store. She now owns a gourmet cooking shop on Main Street.
“It’s really exciting because once the infrastructure catches up in five years, we’ll have a new recreation center, new restaurants, shopping and a more permanent quality of life,” she said.
Global investors circling
No one up here was surprised when the U.S. Geological Survey reported last week that more than 7 billion barrels of extractable oil and 0.7 trillion cubic feet of natural gas are waiting to be collected from this oil patch that extends west into Montana and up to the Canadian border.
In fact, several experts expect those forecasts to double again as new fracking technology helps oil companies dig down to new formations deep below the Williston basin.
“There might be another 15 formations,” said the mayor, who has on his office shelf a glass jar half-filled — not half-empty — with sweet Bakken crude that looks likes root beer.
As North Dakota Alaska and approaches Texas, becoming what Sen. John Hoeven calls “the energy powerhouse of the nation,” Connecticut investor Michael Litt chuckles over breakfast at Lonnie’s Roadhouse Diner in Williston.
A former founder of FrontPoint Partners, a hedge fund he sold to Morgan Stanley, Litt makes frequent trips to Williston. He’s lining up fellow investors and land for a NASCAR-themed sports bar along with the new housing opportunities such as the 70-acre farm below the hillside near Springbrook.
“What’s a global asset allocator like me doing in a truck stop diner in Williston?” he said. “Bringing picks and shovels to the gold miners.”
Technology and global factors fuel his buoyant outlook.
“They’re not jamming things in the ground and hoping for gushers out here anymore,” Litt said. “They had seismic software and science that make things 95 percent certain when they drill.”
And while the BP disaster in the Gulf of Mexico, the violent attacks at oil facilities in Algeria and the political tenderness in Venezuela highlight the risks in other oil-producing venues, he says North Dakota is the safe bet.
“I was on Wall Street in 1999 for the Internet boom and in Shanghai in 2007 when you literally couldn’t count all the construction cranes,” he said. “Now, Williston is where the growth is.”
As workers tire of leaving their families to harvest the riches from the Bakken oil fields for weeks at a time, Litt insists they’re going to want more permanent housing and more diversions “to satisfy a lifestyle that can’t just be about work all the time.”
He isn’t the only one poised to bring in the capital to help with the shift to a more sustained future from a transient workforce of laborers fleeing debt and unemployment back home.
Investors from around the globe are pinpointing this remote landscape to make a buck. To wit: Turkish businessmen are behind the new Fuddruckers coming to Williston.
And Chinese investors are ready to pour in more than $2 million for a planned housing community called Buffalo Hills in the burgeoning town of Watford City 45 miles south of Williston, according to Donna Zhao, CEO of an investment firm in San Jose, Calif.
Even more confidence
“This new government report was huge news and gives confidence,” she said by telephone. “Things are catching fire, and we had $800,000 in commitments in one day from Chinese investors wanting to buy in as the news spread by word-of-mouth.”
At the Little Missouri Grill in Watford City, near hillsides crammed with campers and RVs, the servers’ T-shirts reflect the giddiness. One proclaimed: “Rockin’ the Bakken.”
Another server, Yvette Corstensen, wore a shirt sporting the image of a drill rig beneath two halos, vowing that “The Strong Will Survive — Oil Field Wife.”
Her husband, Casey, was an executive chef in Utah and couldn’t find work in Las Vegas. He’s now a “sand pusher,” pumping silica into frac wells to open things up for the oil to flow.
“This latest news is awesome and shows we’re all in this for the long haul,” Yvette Corstensen said. “This will just bring more and more people here, which drives the locals a little crazy.”
Her fellow waitress, Judy Perry, loathes all the truck traffic but built a one-room cabin on her land, which she rents out to oil workers for only $600 a month.
The doubling estimate, she says, “is not only good for me but for the whole country.”
Back up on the hillside 13 miles northeast of Williston, engineer Jeff Ames points out to Litt and the others where the railroad terminal in Epping sits over the hill. The workers there need a place to live, he says, as will the schoolteachers and grocery store owners.
They jump back in their trucks and head to 60 acres for sale near the fairgrounds in Williston and dream about adding retail, hotels and maybe a convention center.
Said Litt, “It’s time to create an oasis in this desert.”