The Bakken Shale | November 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
Total Rigs in North Dakota- 27 (+3)
Total Rigs in United States- 569 (+19)
Total U.S. Rigs 76% YTD
Bakken Top Producer
Top Producer By BOE – Continental Resources
According to a research by the Institute for Energy Economics and Financial Analysis, a shortage of high-quality drilling locations poses a long-term risk to oil production in the Bakken formation (IEEFA). Producers have concentrated on core areas where horizontal wells allow better access to oil since the Bakken boom began 13 years ago. However, according to the IEEFA, there are only about 700 top-tier wells left. Bakken producers, on the other hand, drilled 600 high-calibre wells in 2019. The fall in high-calibre wells has significant fiscal, financial, and policy consequences. Investors will need to keep their expectations in check. Oil and gas earnings will be lost to state and local budgets. Existing pipelines, like the contentious Dakota Access Pipeline, will need regulators to review their economic basis (DAPL).
Even as crude prices have risen back to $80 a barrel, the Bakken oilfield in North Dakota, the source of America’s oil boom a decade ago, is failing to recover from last year’s market slump. After a decade of rapid development, oil producers in the Bakken are now confronted with the geological reality that most of the better wells have already been drilled. With a limited number of high-quality wells available to drill — those that can produce large volumes of oil for a reasonable cost — Bakken producers will find it difficult to restore output to pre-pandemic levels.
The use of $150 million in federal stimulus funds to build a new pipeline to transport natural gas from the Bakken to eastern North Dakota is one of the problems that state lawmakers will debate when they meet at the Capitol. During the special session, lawmakers expect to divide $1 billion from the federal American Rescue Plan Act, and the money set aside for a pipeline might make the potential of such a project more appealing to entrepreneurs. North Dakota Pipeline Authority Director Justin Kringstad said, “There’s been a longstanding desire to see more North Dakota gas used in the state.”
Top Producers By BOE
|Change||Rank||Company||MMBOE Production (8/21)|
North Dakota Oil Production
North Dakota Natural Gas
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