by copious.abundance » Wed 22 Oct 2008, 21:47:43
$this->bbcode_second_pass_quote('skeptik', 'D')epends which end of the range you're looking at. What's the marginal cost of getting oil out of the Athabasca Tar Sands or the Bakken Shale?
More than $70?
For the Bakken, it varies greatly.
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$this->bbcode_second_pass_quote('', 'W')ith oil now touching in at $70 a barrel, it's likely some producers will pull away from areas where they had been looking to expand.
Lynn Helms, director of the state's Department of Natural Resources, said he doesn't expect changes in the main core of the Bakken - Dunn, McKenzie and Mountrail counties - but acknowledges the perimeter of the Bakken play could be affected.
"This oil price is going to dampen expansion of the play but it's not going to lead to collapse of the Bakken play or the play going away," Helms said. "The main areas are very solid."
Helms said the expansion areas are in trouble. However, he said there is no single oil price floor that applies statewide.
The old rule of thumb of $65 to $75 a barrel to support the Bakken is less true with drilling technology that increases well output from an average of 250 barrels two years ago to 650 barrels a day today in some places.
"Mountrail is performing so well with the new technology that break-even prices for those kinds of wells is down around $20 a barrel," Helms said. Those wells used to break even around $60.
"Mountrail is the exception to the rule," Helms said.
For Dunn and East McKenzie counties, where 32 rigs are in operation, the break-even price is about $40 a barrel.
Trouble spots are in Burke County at an $80 break-even range and Divide at $55, along with Ward and McLean counties, he said.
