Updated September 17, 2024
Bakken crude price differentials and production have been relatively stable over the past 12 months. However, an increase in gas production and the lack of gas takeaway capacity is an emerging threat to Bakken crude production.
Recent News:
- (July 30, 2024) - Kinder Morgan plans to convert the 88,000 bbl/d Double H crude oil pipeline from the Bakken to NGL service by Q1 2026
- (February 22, 2024) - Chord Energy's acquisition of Enerplus for $3.8 billion, forming the Bakken Shale's biggest producer, will boost its output to 287 MBoe/d and create an $11 billion enterprise with nearly 1800 undeveloped locations breaking even at $60/Bbl oil prices
- (January 19, 2024) - Bakken oil production in North Dakota grew last year, pushing total output to 1.3 MMBbl/d, driven by a surge in drilling rigs and the use of drilled but uncompleted wells (DUCs) from 2019 Enverus increased its annual forecast for US oil production growth to 1.2 MMBbl/d due to the Bakken's performance, although they do not expect this growth trend to continue, citing current rig counts While oil production may face challenges in sustaining growth, natural gas production in the Bakken is on the rise, testing the limits of existing pipeline and processing capacity and prompting concerns over takeaway capacity
- Enverus increased its annual forecast for US oil production growth to 1.2 MMBbl/d due to the Bakken's performance, although they do not expect this growth trend to continue, citing current rig counts
- While oil production may face challenges in sustaining growth, natural gas production in the Bakken is on the rise, testing the limits of existing pipeline and processing capacity and prompting concerns over takeaway capacity
- (June 21, 2023, NGI) - Bakken Shale oil producers, enduring low natural gas prices, may find respite as projects to increase basin takeaway capacity advance. Key projects include Kinder Morgan Inc. and TC Energy Corp.'s plan for 430,000 Dth/d of natural gas transport capacity from the Bakken Shale, aiming for a 2026 start, and WBI Energy Inc.'s Grasslands South Expansion Project, due later this year. Despite low prices, North Dakota saw a 2% month-on-month gas production increase and a 1% oil production rise in April.
- (February 3, 2023, Argus) - The Army Corps is expected to release a long-anticipated environmental review of the Dakota Access Pipeline (DAPL) this spring. Opponents of the pipeline were in a battle in the courts even before the DAPL's commissioning in 2017. After the Army Corp EIS study is complete, a 45-day public comment period ensues. The final version of the EIS will lead to a record of the decision on the easement from the Army Corps, which could have consequences for the pipeline, according to the Harvard Law School's Environmental and Energy Law Program (EELP).
- Enverus increased its annual forecast for US oil production growth to 1.2 MMBbl/d due to the Bakken's performance, although they do not expect this growth trend to continue, citing current rig counts
- While oil production may face challenges in sustaining growth, natural gas production in the Bakken is on the rise, testing the limits of existing pipeline and processing capacity and prompting concerns over takeaway capacity
Hedging Considerations: Using financial derivatives to hedge price risk at either Clearbrook or Guernsey can be difficult. There is little or any liquidity in forward pricing for Bakken-linked crude differentials. Many counterparties do not make a market for these prices; if they do, spreads can be quite wide. |
|---|
