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June 22, 2021

Oil and gas production recovery in Bakken shale is still long way off

The Bakken shale saw a decline of 6% in oil and gas production since November 2019, impacted by the Covid-19 pandemic and restrictions.

By GlobalData Energy

GlobalData’s latest report, ‘Bakken Shale in the US, 2021 – Oil and Gas Shale Market Analysis and Outlook to 2025,’ provides a comprehensive review of hydrocarbon appraisal and development in the Bakken shale play against the backdrop of the Covid -19 pandemic. The report also provides an outlook for oil and gas production in this play, along with the competitive positioning of major operators.

The Bakken shale, located in North and South Dakotas and Montana in the US, accounted for 11% of oil and 3% of natural gas production in the Lower 48 in 2020. The play peaked in production in November 2019, with 1,525 thousand barrels of oil per day (Mbpd) and 3.1 billion cubic feet per day (Bcfd) of natural gas. Since then, it has experienced a decline of 6% annually.

The lowest levels of production since the end of 2019 was in May 2020 with 890Mbpd and 1.9Bcfd, which was a 41% drop in oil and a 39% drop in natural gas production. Production in the play is expected to slowly grow as oil prices recover. However, it is not expected to reach pre-pandemic levels in the next five years.

The Covid-19 outbreak and subsequent restrictions on economic activities further affected the oil and gas production in the Bakken. The play averaged 55 drilling rigs in 2019 that decreased to an average of 24 rigs in 2020, a 79% drop. While other basins throughout the US have increased their rig count with commodity prices rising to pre-pandemic levels, the Bakken has lagged with its rig count. Lately, the number of rigs has started to slowly increase and has reached 16 rigs in June 2021, which is just a six-rig increase compared to the lowest number recorded last year. With West Texas Intermediate (WTI) future prices averaging $62 per bbl for the remainder of 2021, GlobalData expects a slight uptick in the rig count but not the level that was observed before the Covid-19 pandemic.

According to GlobalData, Continental Resources Inc, Hess Corp, Whiting Petroleum Corp, Marathon Oil Corp and Enerplus Corp were the leading producers in the Bakken shale in 2020.

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