The United States Geological Survey (USGS) declared the Bakken Shale the largest continuous oil accumulation it has ever assessed. And so far North Dakota is reaping the lion’s share of the spoils.

But Keith Kohl, editor of “Energy and Capital,” thinks that Montana is due for a renaissance after production dropped from 99,000 bo/d in 2006 to 76,000 bo/d in 2009. “Montana became the forgotten step-child in the US oil industry,” Kohl wrote.

The Bakken Shale covers a large portion of eastern Montana. (Image courtesy of Energy & Capital)The Elm Coulee field in the eastern portion of the state put Montana on the map in 2000, and by 2006 it was producing 56,000 bo/d from about 350 wells. By 2007 it had become the highest producing onshore field in the lower 48 states.

Then the USGS made its proclamation, and the rest is history -- the number of rigs drilling on the North Dakota side of the border has increased 333% since December of 2008. By the end of July of this year, North Dakota had overtaken Oklahoma to be the country’s third most active drilling state, Kohl wrote. Last year it surpassed the Sooner State to become the fourth-largest oil producer in the US.

By comparison, there were only five rigs drilling in Montana in Baker Hughes’ latest rig count. But Kohl said that other signs point to a drilling boom in Montana. Why?

For one thing, Kohl estimates that Montana leases are looking more attractive as companies continue to hone their drilling and completion techniques. More telling is what’s happening at the permitting level. The Montana Board of Oil and Gas is being “flooded” with drilling permit applications, Kohl wrote. “According to one administrator, Tom Richmond, oil and gas there could [account for] more than 300 permits this year.”

Montana’s Bakken acreage is not as extensive as that in North Dakota. But with Bakken competition at a frenzied pace to the east, Montana could prove to be the next “sweet spot” in US oil shale development.

Map: The Bakken Shale covers a large portion of eastern Montana. (Image courtesy of Energy & Capital)