The Bakken Shale| April 2021
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 break even point at US$46/bbl (2020). The top formations within the region are the Three Forks and the Spanish formations.
State Drilling Statistics (End of March)
Total Rigs in North Dakota- 15
Total Rigs in United States- 440
Total U.S. Rigs up 8% YTD
State Permitting Data (End of March)
Permits Approved – 55
Bakken Top Producers
Top Producer By BOE – XTO Energy
Fate of Dakota Access pipeline at stake at Friday court hearing Article 2
It is possible that the DAPL could be shut down in the coming weeks. After a judge revoked a key environmental permit last year, he ordered the US Army Corps of Engineers to update the court to update their report on their environmental review if they feel the pipeline should continue to operate. Now, operators plan to ask the supreme court to intervene. If the pipeline was to be shut in, it would create a whole new slew of problems to address. Some native american tribes would no longer be able to collect their royalties. Grain shipments would bottleneck as more oil is shipped by rail. The counterargument would be the environmental impact that some Native American tribes protest, especially in the case of Lake Oahe, a critical source of freshwater. While there is likely to be no resolution soon, tensions still remain high.
Equinor Completes Bakken Exit in $900 Million Sale
Equinor ASA on April 27 completed the sale of its entire position in the Bakken field, marking the Norwegian company’s exit from the U.S. shale play. Grayson Mill Energy LLC, a Houston-based E&P company backed by EnCap Investments LP, agreed in February to acquire Equinor’s Bakken interests, along with associated midstream assets, for a total consideration of around $900 million. “Equinor is optimizing its oil and gas portfolio to strengthen profitability and make it more robust for the future,” Anders Opedal, president and CEO of Equinor, said in a statement in February. “By divesting our Bakken position we are realizing proceeds that can be deployed towards more competitive assets in our portfolio, enabling us to deliver increased value creation for our shareholders.” Equinor had been active in the Bakken play since its acquisition of Brigham Exploration Co. for $4.7 billion in 2011.
Diamondback Energy Sells Bakken Asset to Oasis in $745 Million Cash Deal
Diamondback Energy Corp. agreed on May 3 to sell certain Bakken assets it acquired through its roughly $2.2 billion all-stock acquisition of QEP Resources earlier this year. The transaction, with Oasis Petroleum Inc., includes the sale of select Williston Basin assets from Diamondback Energy in a cash transaction valued at approximately $745 million. On May 3, Diamondback also agreed to divest “noncore” acreage from its Permian Basin position, the company main focus, for a combined gross purchase price of $87 million. Diamondback Energy closed out 2020 with the acquisition of publicly traded QEP Resources and private equity-sponsored Guidon Operating for a combined $3 billion. In addition to adding a foothold in the Williston Basin, the dual mergers helped Diamondback build out its position in the heart of the Midland Basin.
Hess Sells Bakken Acreage to Enerplus for $321 Million
The deal strengthens Hess’s development plan as some of these assets won’t be further developed until at least 2026 which “brings material value forward and further strengthens our cash and liquidity position” according to CEO John Hess. Enerplus, on the other hand, considers much of this acreage ready to produce and expects 10 years worth of drilling in the region. Enerplus will finance the deal with $150 million of cash on hand, while sourcing the rest from a credit facility. Hess has been focusing more on offshore assets off the coast of Guyana, and likely plans to move more operations there.
Top Permitting By Operator (April)
Top Producers By BOE (2021 cum)
North Dakota Production
North Dakota Natural Gas
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