Oil resuscitates N. Dakota town

PARSHALL, N.D. – In this tiny reservation town a hundred miles from the Canadian border where the temperature once hit 60 below zero, a Southern twang is sometimes heard over the din at the diner and there is talk of Texas tea beneath the streets.

Roughnecks from Texas and Oklahoma have traveled here on hopes that they share with the town’s 1,000 or so inhabitants – that there is oil in Parshall.

About 400 people own mineral rights under homes, businesses, churches, nursing homes or tribal land. All of it has been leased, town officials said.

“We were dying,” said Loren Hoffman, a farmer and the city auditor. “Our town was slipping backward, but now we’re on the upswing.”

While it is the namesake of the Parshall oil field, which sits in the crude-rich Bakken shale formation, a quarter of Parshall’s residents live in poverty.

No one is sure how much oil might lie beneath the town, but with the wells spreading south toward Parshall near the Fort Berthold Indian Reservation, things have begun to change.

“We’re seeing an influx of youth that we didn’t have before,” Hoffman said.

At Parshall’s only restaurant, the Redwood, there is now Tex-Mex food on the menu, though locals were leery of it at first.

Business at the Redwood Restaurant, like other establishments in town, is brisk. The hamburger smothered with gravy is still a big seller.

A number of businesses are reporting record sales, said Parshall Mayor Richard Bolkan, who also owns the town grocery store.

Occupancy is nearly at 100 percent at the 15-room Parshall Motor Inn, said owner and manager Jeanette Cecil.

Cecil purchased the inn – and the mineral rights below it – in August 2006, less than a year before the oil boom, she said. She plans a 10-room expansion for next spring to house the welders and surveyors who are flooding into town.

In just over a year, horizontal oil wells have been spudded throughout the region, where the hilly prairie had been previously disturbed only by crops and Cold War-era missile silos.

Dozens of nodding donkey pumps dot the landscape and flames from waste gas light the night sky.

In April, the U.S. Geological Survey estimated that as much as 4.3 billion barrels of oil can be recovered from the Bakken. The agency said the Bakken, much of which lies two miles under the surface in western North Dakota, was the largest continuous oil accumulation it has ever assessed.

Wichita, Kan.-based Slawson Exploration Co. has begun drilling on the outskirts of Parshall, and another well is planned this month that will partially drill beneath the town, said Todd Slawson, one of the company’s owners. Next year, a rig will likely drill directly beneath the town, he said.

“We’ve never drilled anything like this,” he said. “Every time we drill, it is a benefit to someone. This happens to be a benefit to a lot of people.”

The city is leasing land at $500 an acre, plus royalties. Individuals are getting paid about $85 a lot, which is about one-sixth of an acre, Hoffman said.

But the rush of oil companies has already brought a measure of prosperity to Parshall, where according to the 2000 Census the unemployment rate topped 20 percent. Unemployment was more than 40 percent for the reservation.

Cecil, the owner of the motor inn in town, said people are keeping quiet about their chances of striking it rich, and no one she knows is banking on the money.

“Everyone in town is so busy – I don’t think people have stopped to really think about it,” she said.

Mervin Packineau, a member of the Three Affiliated Tribes business council, said some of the tribes’ members have been getting oil royalties from wells operating on their land. One family, he said, got $800,000 in recent months.

“We had families who were so poor they could barely make it from day to day,” Packineau said. “Now all the sudden they get this money, so it’s a huge lift to some of our families around here.”

Parshall, with four city employees, is hoping for a rejuvenation from royalties, Hoffman said.

The city already has seen a big boost in revenue from selling water to drilling companies, which use it to fracture rocks to release oil.

Parshall just acquired its first new piece of equipment since 1976 – a lawn mower.

“That little town of Parshall will never be the same, and I hope everybody really doesn’t change that much,” Slawson said. “But what I know about North Dakotans, is that the most they would do with all that money would be to paint their houses.”