Investment Opportunities in South Dakota?

by | Aug 4, 2023 | South Dakota

Have you heard about investment opportunities in South Dakota in the oil and gas industry? Neither had I, so when the buzz started growing, I did my research.

Hey Greg, what’s the word on investment opportunities in South Dakota in the oil and gas industry?

When the buzz started growing online, I had to take a research break. South Dakota? Really, nothing big in oil & gas is happening in South Dakota. According to the EIA:

South Dakota has no significant proved crude oil reserves and no oil refineries, but it does have a small amount of crude oil production.

For comparison to what we have going in in Oklahoma, please comopare these two charts:

south dakota 3 year oil productions

South Dakota Oil Production 3-year Graph from YCharts.com

oil production in oklahoma the last 3 years

Oklahoma Oil Production 3-year Graph from YCharts.com

I came across these nuggets from the South Dakota Department of Agriculture & Natural Resources:

investment opportunities in south dakota | south dakota department of agriculture and natural resources

On the department’s oil & gas webpage, they shared:

OIL & GAS
IN SOUTH DAKOTA
Our purpose is to implement the state oil and gas laws in a timely, efficient, and customer service oriented manner that will encourage exploration for and development of oil and gas; prevent waste; and protect correlative rights, water resources, the environment, and human health.

MONTANA-DAKOTAS OIL AND GAS LEASE SALES

BLM Montana/Dakotas conducts quarterly oil and gas lease sales, as required by the Mineral Leasing Act of 1920, as amended, and the Mineral Leasing Act for Acquired Lands of 1947, as amended, when eligible lands are available for leasing. Lease sales are held on a quarterly basis to allow field offices sufficient time to conduct an environmental analysis. However, the BLM has the discretion to offer or defer any parcel during any sale.

So what does this mean for you?

This information did pique my attention about potential investment opportunities in South Dakota.

Leasing of lands does not guarantee immediate development, but it provides companies with the opportunity to secure rights to valuable mineral resources before investing in extensive exploratory procedures.

These preliminary techniques, such as geophysical testing, help assess the economic viability of potential development. Consequently, a substantial portion of leased lands may remain undeveloped, with companies strategically evaluating the feasibility and profitability of their investments.

Within the realm of the Bureau of Land Management (BLM), the agency responsible for overseeing public lands, the percentage of developed areas for oil and gas resources remains quite low, amounting to less than one percent of the total BLM-lands.

This statistic indicates that the process of converting leases into active, producing sites is a selective and deliberate one, driven by careful analysis and prudent decision-making. Various factors, such as market conditions, environmental considerations, and regulatory compliance, contribute to the cautious approach in turning leases into productive operations.

In essence, leasing offers companies the initial steps towards potential resource extraction but does not guarantee immediate development. Instead, it empowers them to evaluate the viability of their investments through systematic assessments, ultimately resulting in a thoughtful balance between resource exploitation and environmental preservation.

As such, the low rate of development within BLM-lands reflects a measured and responsible approach to resource management in harmony with broader societal and ecological interests.

crude oil reserves texas 2013

Texas Crude Reserves (2013)
Given for reference purposes 33.73%

crude oil reserves north dakota 2013

North Dakota Crude Reserves (2013)
16.61%

crude oil reserves south dakota

South Dakota Crude Reserves (2013)
No Data 

One last stop – at the South Dakota Geological Survey Page showed that currently South Dakota has an Oil & Gas initiative designed to:

Create, compile, and disseminate information having the potential to aid economic development in South Dakota related to the exploration and development of oil and gas resources.

In a Nutshell, here is what I see for investment opportunities in South Dakota:

There is some oil in South Dakota, but not at the same scale as North Dakota or Texas. According to local media in ND, who ranked the Top 15 states in order, based on their oil reserves, Texas is #1, North Dakota #2, Oklahoma #7, and South Dakota did not make the list.

Currently our projects in South Texas and North Dakota are full, so we don’t have any investment oppotunities there, but there is Oklahoma to consider.

Currently in OK:

 

  • Crude oil proved reserves (million barrels): 2,047
  • 5-year change in proved reserves (percent): +64.9%
  • 5-year change in proved reserves (million barrels): +806
  • Number of operating refineries: 5
  • AND Cushing is in Okahoma…a mahor hub in the oil pipeline, which gives it a prime location for an oil boom.

South Dakota may be an area of development in the oil and gas industry 10 or 20 years down the road, but you want to invest where your money is going to make a faster turn-around than that. Oklahoma is the ideal location for investing in oil. 

I could go on and on in this post about why Oklahoma and why Cushing makes Oklahoma such a prime location for ROI, but let’s chat instead. Schedule a time that works for you and I will give you call: https://calendly.com/ghillman/catchup

Have you heard about what we're working on in Oklahoma?

Let’s talk soon about it. Schedule a quick, 15 minutes or less, catch-up call with me below.

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