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Page added on September 27, 2018
Move Over, Permian. Bakken’s Making a Comeback.
After months of being the red-headed stepchild to the Permian, the Bakken shale play is getting a resurgence.
Crude oil production in North Dakota reached an all-new high for the second time this year in July, averaging 1.27 million barrels per day, according to the most recent figures available. Monthly oil production in July was 39.35 million barrels.
Wood Mackenzie broke down some key factors that are attracting investments to the Bakken and nearby Three Forks formation (located just below the Bakken).
“Operators are planning to spend $5 billion in planned CAPEX this year in these areas,” Pablo Prudencio, research analyst for WoodMac’s Lower 48 region, told Rigzone. “Operators are expected to spend more than $40 billion in the play over the next five years.”
In August, shale producer Continental Resources said it was allocating $200 million this year to increased drilling and completion activity, with a third of that focused on the Bakken, Reuters reported.
Prudencio said the investments will be significantly less than the Permian due in part to activity levels and rig count.
WoodMac’s analysis further included the following:
- Rise in Gas Production: Operators are focusing on the core of the play, which tends to be gassier. Gas production is also continuing to rise, and gas processing plants are being built to meet North Dakota’s flaring limits.
- Oil Production: Bakken and Three Forks production contributes an average of 13 percent to the U.S. Lower 48 production outlook.
- Crude Takeaway: Long-term oil production growth is slowed by pipeline takeaway capacity. Oil production is expected to peak at about 1.5 million barrels per day and plateau after.
- Sluggish M&A: Recent years have shown lackluster M&A activity relative to the size of the play. Key themes include Private equity-backed operators entering the play and public E&Ps selling Bakken assets to focus on other plays such as the Permian.
Prudencio added that WoodMac has been following the production comeback for a while now and technology has definitely played a part.
“Three main factors have contributed to this,” he said. “They are higher oil prices, improved transportation due to new pipelines and more productive wells. The productivity of the wells is mainly due to technology and improved completions. Drilling rates have improved because the wells are being drilled faster.”
19 Comments on "Move Over, Permian. Bakken’s Making a Comeback."
Coffeeguyzz on Thu, 27th Sep 2018 8:03 pm
For the folks interested in what is going on in the real world of unconventional hydrocarbons, the Bakken may offer a fascinating snapshot come this time next year.
It is expected that the USGS will release an updated assessment and the TRR could be WAY higher than the present numbers.
While this will be no surprise to those of us who are following these things (as opposed to the recurring ‘We’re running out tales), the bigger significance will be how the appraisal affects ALL unconventional plays – including several that are not prominent on the radar. (Think PRB, TMS, Uinta, amongst many others).
Reason?
The much pooh poohed technological advances have been real, been HUGELY impactful, and are set to vastly expand prospective areas all across the USA.
Read it and weep again, folks.
Brent Georgeson on Thu, 27th Sep 2018 8:15 pm
Wow coffeeguy all this new oil production has really lowered all out debt level too….
makati1 on Thu, 27th Sep 2018 8:42 pm
Coffee, all you are following are lies and deceptions. No real numbers ever come out of the oily world. None. There is a lot of hype (propaganda) to keep the suckers … er … investors on board until they can be sucked dry. That is all it is. The day of reckoning is fast approaching when all of those oily drams will end, along with the BAU we know today.
Anonymous on Fri, 28th Sep 2018 3:21 am
The peak oiler TODsters dismissed the Bakken as it was rising. Read the predictions by Piccolo and Rune. They got their butts kicked.
Davy on Fri, 28th Sep 2018 4:49 am
“Coffee, all you are following are lies and deceptions. No real numbers ever come out of the oily world.”
These energy insiders have proved peak oilers wrong now for a long time. They have won the argument but time is not on their side. Globally US shale is not going to make up for declines elsewhere. Globally the right conditions for an explosion of other shale plays is not present now nor in the future. Demand destruction could be a more powerful force boosting supply from the glut that will occur when demand is absent. It is also true once demand destruction occurs peak production may be likely if the demand destruction is significant and destructive. Renewables and BEV’s are not happening quick enough and cheap enough. They have not addressed the technical issues of storage and the economic issues of infrastructure. The infrastructure needed and the time to build it appears to not be compatible with the pace of aggregate decline in net energy combine with the demands of global growth. Growth cannot drop for very long without disastrous consequences. Gas has its limitations. NUK is stagnate and stuck in the mire of negative public opinion. Energy is still a problem and peak oil dynamics is far from dead just because technology open up some sources.
Coffeeguyzz on Fri, 28th Sep 2018 12:33 pm
Davy
As of this posting, the heat energy contained in a barrel of oil costs $72.46 (WTI).
Equivalent amount of energy in gaseous form can be had for $17.40 ($3 HH).
This 400% difference for what is essentially the same thing – energy expressed in heat – is spurring a vast amount of research on a global basis to replace oil based applications with their gaseous cousins.
Transportation has always been the big enchilada in regards to oil’s uses.
Intense efforts are not too far off in effective utilization of natgas.
Global supplies of natgas can be measured at about a century’s worth.
Anonymous on Fri, 28th Sep 2018 12:45 pm
EIA 914 report came out today (monthly production):
JUL18: 10.964 million bopd
JUL17: 9.230 million bopd
YTY change: +1.734 million bopd
Davy on Fri, 28th Sep 2018 12:49 pm
“Transportation has always been the big enchilada in regards to oil’s uses.
Intense efforts are not too far off in effective utilization of natgas.”
Backup for renewables will be increasingly important also.
Anonymous on Fri, 28th Sep 2018 1:34 pm
Texas (just the individual state) was up over a million bopd in the last year:
JUL17: 3.442 million bopd
JUL18: 4.469 million bopd
YTY change: +1.027 million bopd
I AM THE MOB on Fri, 28th Sep 2018 1:57 pm
The Inevitable Oil Supply Crunch
“The warning signs are there – the industry isn’t finding enough oil.”
That’s the start of a new report from Wood Mackenzie, which concludes that a supply gap could emerge in the mid-2020s as demand rises at a time when too few new sources of supply are coming online. By 2030, there could be a supply shortfall on the order of 3 million barrels per day (mb/d), WoodMac argues. By 2035, it balloons to 7 mb/d, and by 2040, it reaches 12 mb/d. “Barring technology breakthrough beyond what we already assume, we’ll need new oil discoveries,” the report says.
“The warning signs are there – the industry isn’t finding enough oil.”
The precise figures vary, but Rystad Energy came a similar conclusion, noting that the total volume of new oil and gas reserves discovered plunged to a record low in 2017. “We haven’t seen anything like this since the 1940s,” Sonia Mladá Passos, Senior Analyst at Rystad Energy, said in a December 2017 statement. “The most worrisome is the fact that the reserve replacement ratio in the current year reached only 11% (for oil and gas combined) – compared to over 50% in 2012.”
But, of course, that rate of discovery remains far below those levels, so the supply crunch may take place much sooner. Moreover, because large-scale projects take several years to develop, the activity taking place today will determine the supply mix in the mid- to late-2020s.
https://oilprice.com/Energy/Energy-General/The-Inevitable-Oil-Supply-Crunch.html
I AM THE MOB on Fri, 28th Sep 2018 2:01 pm
Wood Mackenzie’s report is projecting the obvious and that is we are heading towards an oil supply crunch possibly as early as 2021.
The global oil market needs to add some 15 million barrels a day (mbd) between now and 2025 to be able to meet growing global demand for oil and also to offset a global depletion rate amounting to 5% or 5 mbd, the equivalent of Iraq’s current daily production.
However, judging by current trends, it will be impossible to add 15 mbd between now and 2025 and this is why we could be heading towards an oil supply crunch within the three years.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Anonymouse1 on Fri, 28th Sep 2018 2:07 pm
Coffeeguyzz = Marmitard.
Anonymous also, = Marmitard.
Is there some particular reason, you feel the need to post your corny drivel and hand-waving using multiple sock puppets Marmitard? Who are trying to convince exactly? All you have really managed to accomplish by it fyi, is convince the exceptionalturd(aka dumbass) that playing the sock puppet game is a neat thing to do as well.
Davy on Fri, 28th Sep 2018 2:29 pm
anonymouse1 = gimp
gimp also, = mentally ill and irrelevant
I AM THE MOB on Fri, 28th Sep 2018 2:32 pm
Will World War Three Be Fought Over Water?
https://www.sciencefriday.com/segments/will-world-war-three-be-fought-over-water/
Anonymouse1 on Fri, 28th Sep 2018 2:37 pm
Wow, 3 entire mins between dumbass’s latest, and, his equally dumbass sock puppet, ‘I is the mushminds’ drool.
Here is a helpful tip. Try and exercise a little self-control and wait, at least…4 mins between sock puppets dumbass.
You’re welcome.
Davy on Fri, 28th Sep 2018 3:49 pm
My god gimp you are completely obsessed with your puppet games. You don’t say much anymore beside sock this sock that lol. Is there anything in that itty bitty mind of yours besides puppets? You are a loon.
Duncan Idaho on Fri, 28th Sep 2018 6:09 pm
OIL (BRENT) PRICE COMMODITY
82.69 USD +1.01 (1.24%)
Harquebus on Fri, 28th Sep 2018 6:50 pm
Only when global debts begin to be repaid will the peak oil deniers be able to gloat. Good luck with that.
twocats on Sat, 29th Sep 2018 8:50 am
the output profile for Bakken doesn’t actually look that great. 2017 had four or five months where it wasn’t able to increase overall Bakken production and 2018 already has a few as well. Compare that to 2007 to 2014 when it was UP UP UP all the time. Legacy decline is is reverse exponential – just look at the charts.
so yes, its easy to ramp up after the FLAT LINE of 2015 and the Crumble-cake of 2016. But lets see if Bakken can keep up with Global Demand. Or is Demand suddenly about to “Adjust” due to some “Unrelated Event” like “Debt” or “Trade War”. the deniers have the object permanence capability of an infant.