A boom in shale oil production has seen the economy take off in the US state of North Dakota with a surges in population growth and financial investment.
The state now produces 10% of America’s total oil output, and the area where the oil is found, known as the Bakken Formation, is reputed to have reserves bigger than those in the United Arab Emirates and Saudi Arabia combined.
Developers are using new drilling methods which mean more of the oil can be recovered.
The result of the boom has resulted in a surge of expat workers to the state, which was ill-prepared for the flood of oil workers, with many now forced to sleep in cars and tents due to a lack of housing
Demand for any accommodation, whatever its condition, is high and what little there is commands a premium rent.
£80,000 hotel rooms
Among the property and hotel developers rushing to fill the void is Property Horizons which is refurbishing the Grand Dickinson hotel in an eco-friendly project.
Work will finish by the end of the year, resulting in 111 quality rooms, fitness and business centres and a restaurant.
All of the hotel rooms are now on sale with a price tag of £79,800 with the prospect of projected rental yields of 25% per year.
The property firm’s co-founder Robert Gavin said: “North Dakota is the place to invest in America right now. With today’s technology, we’re already looking at a 65-year extraction lifespan from the Bakken Formation.
“As technology develops, that timeframe is only going to lengthen.”
He said that the hotel will provide investors with an opportunity to get a slice of North Dakota’s boom and help provide accommodation for affluent oil workers.
No housing for oil workers
The scale of the boom can be illustrated by the 2010 US census which placed North Dakota as having the fourth least populated state in the country.
Compared to the census taken 10 years previously, the state’s population only rose by 30,000 with most of employment being centred on farming and agriculture.
North Dakota is now the fastest growing state in America and its population increased by 2% in 2012 and the unemployment rate is the lowest in the country at 3.7%.
Analysts say that it’s not just its accommodation which is lacking in North Dakota but also in a wide range of supporting services which are struggling to cope with the rapidly increasing demand from cash-rich oil workers.
Civic leaders are also hoping to cash in on the boom and are investing heavily in shopping malls and have put together a number of projects to increase housing numbers.
