Bakken News Pulse May 2022

Posted: June 30, 2022

The Bakken Shale | May 2022

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 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

Total Rigs in North Dakota- 36 (+1)
Total Rigs in United States- 753 (+25)
Total U.S. Rigs 60% YTD

Bakken Top Producer

Top Producer By BOE – Marathon Oil

Basin Highlights

Workforce Shortage Limits Rate of Growth

Although North Dakota production is rapidly approaching pre-pandemic production, available labor serves as a hurdle to this goal. Last month there were only 15 fracking crews in the state. While this is a 5 crew increase since the start of 2021, it is still a far cry from the 25 crews that were working pre-pandemic. Department of Mineral Resources director, Lynn Helms, said “One company has a dozen rigs available in North Dakota, but it’s taking them two months to hire and train a crew. In some cases, it takes three attempts.” Plenty of industry workers felt that they wanted more secure employment and left oil and gas entirely leaving a much smaller pool of candidates to pick from.

A Lack of Proposals

The North Dakota Industrial Commission moved the deadline for pipeline proposals out to August 15th after no applications were received by the deadline set in May. The state is looking to connect the western oil patch to the eastern side of the state, but no companies seemed interested in the work. In November, North Dakota Legislature marked $150 million in COVID aid to construct this natural gas pipeline in order to cut down on flaring and move the much-needed gas to folks who don’t have access. WBI Energy owns and operates nearly 4000 miles of lines in the state and cited regulatory uncertainty, limited demand, and rising costs between labor and land as the primary reasons for the project being unviable. WBI is a subsidiary of MDU Resources Group, North Dakota’s one, and only Fortune 500 Company.

Natural Gas Makes a Quick Rebound

Despite Bakken crude oil production decreasing by 6% in 2021, natural gas production increased by 9%. 2021’s high was 2.97 billion cubic feet per day which was actually more than 2019 by 0.02 billion cubic feet. It is safe to say that natural gas production has now surpassed pre-pandemic levels. The first reason for the increased gas production relates to North Dakota’s gas capture targets as the state does its best to avoid needlessly flaring away free energy. Gas capture rates were at 74% in 2014, a stark difference from last December’s 92.5%. Another contributing factor is the ever-increasing gas-oil ratio (GOR) as producers continue to prioritize the exploration and production of oil-based assets.

Top Producers By BOE

ChangeRankCompanyMMBOE Production (2/22)
+11Marathon Oil3.6
-12Burlington (ConocoPhillips)2.6
+23XTO Energy2.3
-25WPX (Devon)1.9
Hyperlinks to available Q3 2021 Reports

Rig Count

North Dakota Oil Production

North Dakota Natural Gas

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