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Bakken News Pulse March 2020

Bakken News Pulse March 2020

The Bakken Shale| March 2020

Field Overview

Named after Henry Bakken, the farmer who owned the land where oil was originally discovered, the Bakken Shale is located in North Dakota, Montana, Manitoba, and Saskatchewan. The USGS estimated in 2013 that this basin has an expected ultimate recovery of 7.4 billion barrels. North Dakota Department of Natural Resources put the breakeven point at US$62/bbl. The top formations within the region are the Three Forks and the Spanish formations.

State Drilling Statistics

Active Drilling Rigs in Basin- 51
Total Rigs in North Dakota- 49
Total Rigs in United States- 664
Total U.S. Rigs down 35.2% YTD

State Top Producers

Top Gas Producer- Continental
Top Oil Producer- Continental


Financial & Economic Updates

Shale gas pioneer Chesapeake Energy taps restructuring advisers

Chesapeake Energy Corp, the oil and gas exploration and production company that helped spearhead the U.S. shale revolution, has tapped debt restructuring advisers amid a rout in energy prices, people familiar with the matter said on Monday. The Oklahoma City-based company, which was co-founded by late wildcatter Aubrey McClendon, was struggling with its debt pile of roughly $9 billion even before an oil price war between Saudi Arabia and Russia and the fallout from the coronavirus pandemic contributed to driving its shares down more than 50% in the last three weeks. Chesapeake has enlisted restructuring lawyers at Kirkland & Ellis LLP and investment bankers at Rothschild & Co who specialize in reworking debt, the four sources said. The company is studying its options and no debt restructuring move is imminent, the sources added, asking not to be identified because the deliberations are confidential.

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State Highlights

Low oil prices ‘extremely brutal’ for North Dakota’s oil industry

he spread of the new coronavirus has halted travel and prompted a price war between two of the world’s biggest oil producers, putting many in the Bakken on edge as the outlook for the oil industry turns bleak.

“It’s been extremely brutal,” said Ron Ness, president of the North Dakota Petroleum Council. “We’re going to see a reaction to this. There’s no ifs, ands or buts about it.”

Low oil prices are already causing companies to cut workers’ hours in the Bakken and will likely lead to layoffs as the state braces for a drop in oil tax revenue. One company, MBI Energy Services, told the state this week that it plans to cut at least 200 jobs. The latest oil figures for North Dakota, released Tuesday, reflect those early pressures. Oil production in the state dropped 3% to 1.43 million barrels per day from December to January, according to the North Dakota Oil and Gas Division. Then, prices tanked, dramatically, in the matter of just a couple days earlier this month when Russia refused to join OPEC in a plan to curb production to keep the world’s oil supply closer in line with sliding demand. OPEC leader Saudi Arabia responded by indicating it would ramp up its oil output. Those moves sent oil prices plummeting.

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Hess Midstream cuts budget, braces for lower pipeline volumes

Houston pipeline operator Hess Midstream is cutting its budget and lowering investor expectations for 2020 as the company braces for lower volumes of crude oil, natural gas and produced water to be sent through its networks. In a Tuesday morning statement, Hess reported that the company is cutting is 2020 budget for expansion projects by 20 percent down to $260 million while its 2021 expansion budget has been cut by 55 percent down to $100 million. The company’s maintenance budget of $15 million remains unchanged. The Houston company is now expecting to finish the year with between $420 million and $440 million of net income. The figures mark a 4 percent reduction of previous investor expectations.

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Top Gas Producers

RankCompanyProduction
(Mscf )
1Continental13,075,562
2Whiting 9,306,027
3Oasis8,247,614
4Hess8,070,634
5Burlington5,580,782

Top Oil Producers

RankCompanyProduction
(Bbl)
1Continental5,329,137
2Hess3,721,119
3Whiting3,222,269
4Marathon2,675,621
5Burlington2,620,773

Refining

North Dakota Production


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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
RARE Petro Analytics

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