The Williston Basin | January 2023

Field Overview

The Williston Basin is a large sedimentary basin along the eastern edge of the Rocky Mountains in western North Dakota, eastern Montana, and southern Saskatchewan, Can. The basin is characterized by thick sequences of sediments that underlie an area of about 110,000 square miles, and it is geologically closely related to the Alberta Basin in Canada. The first wells in the Williston were drilled in the 1936, and by 1954, 80% of possible producing acreage had been leased.

State Drilling Statistics

Active Drilling Rigs in Basin – 42 (-)
Total Rigs in North Dakota – 41 (-)
Total Rigs in United States- 760 (-)
Total U.S. Rigs 18% YTD

Williston Top Producer

Top Producer – Continental Resources

Basin Highlights

Natural Gas Prices Plunge in North Dakota Amid Midwest Oversupply

The value of Williston natural gas has fallen precipitously in the last few months. On January 17, the price was $2.88/Mcf, which was the lowest since December of 2021. Despite LNG differentials being very high, the domestic natural gas demand has softened considerably with better weather in northern climes than was seen earlier in the winter. Relatedly, it seems that many Bakken operators are moving to second- and third-tier inventory with the depletion of primary inventories and the advent of three-mile laterals in the Bakken. Lynn Helms, North Dakota Department of Mineral Resources Division Director, indicated that around half of all Williston rigs are in non-core areas of the Bakken at present.

Hess Tops Wall St Profit Estimates, Signals Dividend Increase

Hess, one of the largest leaseholders in the Williston Basin, outperformed Q4 2022 expectations and indicated the potential of an unexpected dividend increase. With a cash influx largely driven by its 30% ownership stake in Guyana (in partnership with Exxon), Hess will be distributing 75% of free cash flow back to the shareholders in 2023 in the form of dividends and buybacks. Hess’s Bakken assets delivered 158,000 boepd in Q4 2022, slightly under target because of weather-related issues. In the previous quarter, Hess produced 158,000 boepd and has indicated plans to increase production to 200,000 boepd in the Bakken by 2025.

North Dakota Oil Production Could See “Slow Growth” in 2023

North Dakota State Mineral Resource Director Lynn Helms indicated that North Dakota produced 1.1 million bpd by the end of 2022, short of the 1.2 million bopd that his office was forecasting at the beginning of 2022. Helms said that there is considerable bearish sentiment among North Dakota producers about 2023 production, driven by the availability of Tier 1 acreage in the center of the Bakken/Three Forks region, downward-trending commodity prices, natural gas oversupply, and the threat of growing regulatory pressures. Helms also indicated that many companies are still struggling to find enough hands for workover, drilling, and frac crews.

Top Producers

Rig Count

North Dakota Oil Production

North Dakota Natural Gas

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www.eia.gov
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