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Why November Bakken Crude Oil Production Fell 22% Year-over-Year

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Dec. 14 2016, Updated 4:35 p.m. ET

Bakken crude oil production

Shale oil production at the Bakken Shale rose from 228,800 bpd (barrels per day) in November 2008 to ~0.94 MMbpd in November 2016. That’s a 309.0% rise in eight years. However, as crude oil prices remain volatile, oil producers will have less incentive to increase production. We’re seeing this with production at the Bakken Shale.

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Rigs and monthly additions from the average rig

The number of rigs working at the Bakken Shale rose to 35 in November 2016 compared to 31 a month before. A year ago, there were 62 drilling rigs in the region. Most of these rigs are horizontal in trajectory or type.

The EIA calculates that the average Bakken rig added production of 927.0 bpd in November 2016, a 36.0% rise since November 2015. Since November 2008, additional production per rig has risen 4.1x.

What this means for oilfield services companies

Oilfield services and equipment companies lose revenue if drilling activity falls. The lower Bakken rig count and production in the past year are negative for companies such as Carbo Ceramics (CRR), Baker Hughes (BHI), Weatherford International (WFT), and Helix Energy Solutions (HLX).

BHI accounts for 0.29% of the iShares S&P 500 Value (IVE). Read Market Realist’s GE to Partner with BHI? The Changing Oilfield Services Landscape to find out about BHI’s recent partnership proposal with General Electric (GE). You can also read the latest update on the deal in Market Realist’s Can the BHI–GE Partnership Benefit from Global Growth?

In the next part of this series, we’ll look at crude oil and natural gas production at the Niobrara Shale.

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