From Reuters: leaner and meaner -- US shale greater threat to OPEC after oil price war.
This is a must-read article for Bakken fans. It is quite amazing. Note:
- this article is a Reuters article; and,
- of all the shale plays in the US, it is the Bakken that is singled out.
In a corner of the prolific Bakken shale play in North Dakota, oil companies can now pump crude at a price almost as low as that enjoyed by OPEC giants Iran and Iraq.In an earlier post it was noted that break-even costs in some areas of the Bakken are now below $20/bbl. Compare that with the break-even costs for middle eastern oil field breakeven costs at the linked article:
The trillion-dollar mistake:
Rather than killing the U.S. shale industry, the ensuing two-year price war made shale a stronger rival, even in the current low-price environment.
In Dunn County, North Dakota, there are around 2,000 square miles where the cost to produce Bakken shale is $15 a barrel and falling, according to Lynn Helms, head of the state's Department of Mineral Resources.Again, this is a Reuters article:
Dunn County's cost is about the same as Iran's, and a little higher than Iraq's. Dunn County produces about 200,000 barrels of oil a day, about a fifth of daily production in the state.
It is North Dakota's sweet spot because it boasts the lowest costs in the state, yet improved technology and drilling techniques have boosted efficiency for the whole state and the entire U.S. oil industry.
The breakeven cost per barrel, on average, to produce Bakken shale at the wellhead has fallen to $29.44 in 2016 from $59.03 in 2014, according to consultancy Rystad Energy. It added that in terms of wellhead prices, Bakken is the most competitive of major U.S. shale plays.
Wood Mackenzie said technology advances should further reduce breakeven points.More at the link.
I can't wait for Donald Trump to visit the Bakken.
Energy Drilling Rig No. 7 in Casper, Wyoming, from 2014: