Bakken Core Still Viable | Russell T. Rudy Energy LLC
The Bakken shale of Montana and North Dakota has lost the majority of its oil drilling rigs much like the rest of the country. However, operators in all the major shale plays are retreating to the “core of the core” in an effort to maintain production and profitability. In a recent post I cited an example of this in the Eagle Ford shale in South Texas. Now, a recent article in “World Oil” highlights how the same theme is playing out in North Dakota.
The article is based on analysis by Jonathan Lacouture with GlobalData. He points out that despite the general downturn, new wells drilled in Mountrail and Mckenzie Counties outperform those in other parts of North Dakota by 17-50%. His evaluation is based on initial production rates in the first thirty days after completion. Wells in these two counties average 550 barrels of oil per day during this period. Even at current prices drilling still makes economic sense in these areas. As prices have recently firmed, rig counts in Mountrail and Mckenzie Counties are no longer falling and appear to be leveling off.
However, the fringe areas of the Bakken are less productive initially, and activity is not expected to pick up until prices show significant improvement. Unfortunately, Bakken crude sells at a significant discount to West Texas Intermediate due to high transportation costs. This further discourages investment in non-core areas at this time.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/5/22/core-bakken-assets-remain-economical-despite-low-oil-prices-globaldata-says .
