Excellent Update Of US Unconventional Oil Situation During Current Slump In Oil Prices -- The Globe And Mail -- March 14, 2015

If you have time to read only one story today, this story over at The Globe and Mail should be the one. The headline suggests the story is only about Texas, but there is plenty about North Dakota, also.

For example:

Despite the slump, Encana is doubling down in the shale oil business after spending $10-billion last year on Eagle Ford and Permian assets as it shifted focus from natural gas to liquids. The company recently cut its 2015 capital budget by 25 per cent from levels it had projected in December, but it is going full speed in the Eagle Ford and Permian basins, as well as in Canada’s Duvernay and Montney shale plays.

Its strategy will depend on men like Jeff Balmer, the vice-president in charge of Eagle Ford operations, who is tasked with improving productivity and driving down costs in the properties acquired from Freeport-McMoRan Inc. last June. In the nine months since acquiring Eagle Ford assets, Encana has cut drilling times by a quarter and also increased average initial production from its wells by 25 per cent.

“If you look at the improvements on the drilling and completion side, as well as the base production, the progress we’ve made in the short time we’ve been around is phenomenal,” he said in an interview at the Karnes City field office. The company says it can produce oil profitably from its Eagle Ford and Permian properties at $50 a barrel – although spot prices averaged less than that in the first quarter.

And North Dakota:

North Dakota saw its number of uncompleted wells jump by 75 to 825 in January, as producers are spending the $4-million needed to drill a deep, horizontal well but forgoing the $4-million to $5-million needed to frack it and connect it to the Bakken’s gathering system.

“We’re just seeing that inventory grow and grow and grow,” Lynn Helms, director of the state’s Department of Mineral Resources, said on a call this week.

Mr. Helms said producers have a year to complete wells that have been drilled, and he expects more completions and production this summer as demand picks up and some operators hit that regulatory deadline. At the same time, producers could benefit from a sharp decline in state taxes if WTI prices average less than $55.09 a barrel for the next two months, and that tax cut would also encourage production, the state official said.

North Dakota producers are particularly stressed as realized prices for Bakken crude have fallen to $32 a barrel. At those prices, state officials forecast production would drop from current 1.2 million barrels a day to one million in July, 2015, then 875,000 in July, 2016, and 720,000 in 2017. The department estimates that industry currently needs prices of $75 a barrel to sustain production growth.