breitling oil & gas
Bakken losing its sizzle – or shining even brighter? By Chris Faulkner, President and CEO, Breitling Oil & Gas
Maybe it’s a tendency toward pessimism, maybe just the media’s
rig sites. Bakken pioneer Continental, for example, drilled an
delight in “schadenfreude”, but the buzz about Bakken was
average of 11 wells per rig in 2012, compared to an average
decidedly gloomy at the end of 2012. Was the Bakken boom
of seven wells per rig in 2011. Continental has said that it
fizzling? Had it run its course?
expects 262 wells in 2013; the company drilled 175 in 2011 and
Of course not. Bakken will continue to be the biggest oil-
projected a total of 235 wells in 2012.
producing play in the United States, right ahead of the Eagleford
Evidence of an optimistic outlook on Bakken among oil
shale, and it will be instrumental in putting America ahead of
producers: according to North Dakota’s Department of Mineral
Saudi Arabia oil production by 2017.
Resources (DMR), in September there were 190 active rigs in the state, down from 209 in April 2012 – but the DMR reported 262
It’s the Wells, Stupid!
new wells, 32 more than in April. Also in September, the DMR
So, why the doom and gloom at the close of 2012? For some
received 273 new well-permit applications, up from 167 in April.
reason, analysts were focusing on rig counts while forgetting well
84
counts (among other things). Rig counts fell around 10 percent
Back to Bakken’s Beginnings
in North Dakota. At first glance, that’s a scary statistic, especially
Montana is where the Bakken boom first started, with
combined with the fact that Bakken wells generate their highest
production on Montana’s Upper and Lower Bakken layers
production at the outset. Translation: Bakken was on the decline.
peaking out at 313 wells in 2005 and the focus then shifting to
But the Bakken is the gift that keeps on giving. True, rig counts
North Dakota’s more productive Middle Bakken reserves.
fell, but well counts were actually on the rise. Operators have
But don’t count Montana out. The Montana Department
improved efficiencies by drilling multiple wells through single-
of Natural Resources and Conservation issued a record 356
BAKKEN OIL REPORT – SPRING 2013