GlobalData’s latest report, Bakken Shale in the US, 2020 – Oil and Gas Shale Market Analysis and Outlook to 2022′, says that the Bakken Shale play is expected to observe average crude production of 1.1 million barrels per day (mmbd) in 2020. In 2019, it averaged over 1.4 mmbd, which made up almost 17% of the total US oil production.
The oil price drop due to the Covid-19 pandemic has shaken up activity in the Bakken region. The main drivers in the decrease in production are the shutting in of producing wells and the decrease in drilling activity in this region. Most operators have cut the amount of capital they had earlier planned to spend in 2020, subsequently slowing down the drilling activity. This has resulted in over 80% decrease in rig count from 52 in January to just ten in July.
For the first three months of 2020, Bakken was averaging over 1.4 million barrels of oil per day. The biggest drop in production occurred from March to May, bringing the production down to approximately 1 mmbd. The shutting in of wells was the biggest factor in the decrease in overall production.
Bakken Shale, Production in 2020 (thousand barrels per day) vs Rig Count
However, the recent rebound in oil prices has given some operators the confidence to bring back some of the wells that were shut in previously, therefore, leading to a marginal increase in production in June and July. Such occurrence is expected to offset the decline in legacy production and the fall in rig activity, keeping Bakken forecast to remain above 1 mmbd throughout 2020.
In the Bakken Shale play, operators carried out drilling activities in approximately 16 counties in North Dakota, but the bulk of the production was from McKenzie, Mountrail, Dunn and Williams counties. In 2019, McKenzie county accounted for approximately 38% of the gross crude oil and condensate production in North Dakota. This county also led in the issuance of new permits to the operators for drilling. Continental Resources, Oasis Petroleum, XTO Energy and Hess Corp led the drilling activity in the McKenzie county from January 2019 to June 2020, each applying for over 100 new well permits in that county.