Seven thousand oil wells are located within a 160 km radius of Estevan. Most wells are owned and serviced by companies located in Estevan. Oil and gas exploration and production have a great impact on the local economy. The oil and gas industry is Saskatchewan`s largest revenue source. Many people in Estevan are employed in the coal, oil, gas, and power industries.
The Bakken formation has been known for more than 50 years. Until recently, however, technology was not suitable to make this massive deposit suitable for development. The Bakken play is a geological formation of siltstone and sandstone located about 300 metres below the Mississippian formation. The United States Geological Survey (USGS) has estimated technologically recoverable oil reserves are as much as twenty five times that of 1995 estimates. It is estimated that between the Canadian and American portions of this formation, this deposit could be home to over 6 billion barrels of oil, which is more than the known deposits of Saudi Arabia. These same reports suggest about 4 million barrels of light oil per square mile. The wells of the Bakken formation tend to be highly productive, producing in excess of 200 barrels per day (bpd). One of the greatest benefits of this deposit is not its massive size, but the quality of oil found. The Bakken formation is home to sweet, light crude oil with 41 degree gravity.
Technological innovation has led to a major increase in production in the Bakken region of southeast Saskatchewan. There are over 2,350 producing Bakken oil wells. Wells are primarily horizontal, with a multi-stage frac completion. By the end of 2010, production throughout the Bakken had climbed to 458,000 barrels per day, 70,000 on the Saskatchewan side alone. In 2011, the Bakken produced nearly 22.2 million barrels of oil. In the same year, 2,500 new wells were completed and 4,650 more were expected to be drilled throughout the province in 2012, one-third of all those drilled in Western Canada. Two companies, Crescent Point Energy Corp. and PetroBakken Energy Ltd., holds the majority of Bakken production in the province. The remainder is split between the small players.