Bakken crude oil production and rigs
On June 8, 2015, the EIA (U.S. Energy Information Administration) released its “Drilling Productivity Report.” It estimates that in May 2015, the Bakken Shale produced 1.29 MMbpd (million barrels of crude oil per day). This is 1% less than April production levels, but 23% greater than production a year ago.
The number of rigs working at the Bakken decreased to 78 in May, down from 86 in April. A year ago, there were 180 drilling rigs in the region. Most of these rigs are horizontal in trajectory, or type.
Shale oil production at the Bakken increased from ~137 Mbpd (thousand barrels per day) in May 2007 to ~1.29 MMbpd in May 2015. This represents an 840% increase in eight years.
In May, the Bakken Shale produced 608 barrels of crude oil per day per rig, a 48% gain in production per rig since May 2014.
Meanwhile, the high rate of production has led to a decline in crude oil prices. As oil prices remain suppressed, oil producers will have less incentive to increase production, and production may fall, as we’re now seeing with Bakken production.
What this means for Bakken producers
SM Energy and Marathon Oil Corporation together account for 2.98% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Williston Basin has highest tight oil reserves
The Williston Basin’s large size and number of wells have unlocked huge oil reserves in the region. The most productive formations for horizontal drilling and hydraulic fracturing are in Williston Basin’s Bakken and Three Forks formations.
According to the EIA, the Bakken Three Forks play covering portions of North Dakota, Montana, and South Dakota has the largest tight oil proved reserves in the United States.
In the next part of this series, we’ll look at crude oil and natural gas production at the Niobrara shale.