Full Title: Has the Bakken Peaked? Exhaustion of High-quality Drilling Sites Could Point to Falling Oil Output
Author(s): Clark Williams-Derry, Cathy Kunkel
Publisher(s): Institute for Energy Economics and Financial Analysis (IEEFA)
Publication Date: November 4, 2021
Full Text: Download Resource
Description (excerpt):
The Bakken oil industry has been on a gut–wrenching roller coaster ride for the last two years, but it may be headed toward a long–term slide. Crude oil production in the region reached an all–time high in late 2019. But in early 2020, the COVID–19 crisis sent oil prices tumbling, sending oil output from the Bakken Shale formation down more than 40 percent to its lowest level since 2013. Crude oil production partially rebounded later in the year but even today remains about one–quarter below its peak. Despite a sharp rise in U.S. oil prices over the past several months, drilling activity in the Bakken remains at less than half its pre–pandemic levels, and the region’s recent oil output has faltered.
The Bakken’s substantial production decline and the slow recovery of drilling despite rising oil prices raise a critical question: Will Bakken crude oil output ever recover to its previous highs?
A new IEEFA analysis suggests that a shortage of high–quality drilling sites poses a long–term risk to Bakken oil production. This analysis uses data from IHS Markit, one of the world’s premiere oil and gas data services, to explore the productivity of wells already drilled in the Bakken and the quality of the remaining acreage left to be drilled in the region.