So Much For All That Talk About Tier 1, Tier 2, and Tier 3 Areas In The Bakken -- January 25, 2018

This link at Platts.

For years, large public companies have produced crude oil in North Dakota largely in an area known as "the core of the core" of the Bakken shale play. Faced with low, stagnant oil prices, the big producers have focused largely on drilling in McKenzie and Dunn counties, Fort Berthold Indian Reservation and other acreage within the southern portion of the Nesson Anticline.

But rising prices, along with the start of the Dakota Access Pipeline and well productivity improvements, have pushed new companies, mainly smaller operators backed by private equity firms, into acreage long ignored by the state's prominent producers.

While NYMEX WTI prices have nearly doubled over the past two years to around $65/b Wednesday, Bakken differentials have also been on the rise, especially over the past year. Bakken at the wellhead has averaged WTI minus $1.43/b so far in January, compared with discounts of close to $5/b back in January 2016, S&P Global Platts data shows.

Better prices have given drillers the opportunity to expand.

"What we would've considered a fringe area a year ago are now considered economic territory in the state of North Dakota," Justin Kringstad, director of the North Dakota Pipeline Authority, said last week during a conference call.

Relatively smaller operators, either unable or unwilling to acquire so-called Tier 1 acreage in the core of the core, are looking at less costly Tier 2 and even Tier 3 areas and considering adding rigs on the outskirts of the Bakken's most prolific plays. 

By the way, the absolute rig count is not so important as the number of operators drilling.

By the way, speaking of DAPL, I'm not going to post them, and I'm not going to link the stories, but a reader is sending me regular updates regarding trials and sentences of DAPL protestors. There are many guilty pleas and some of them getting stiffer sentences than the woman recently found guilty of intent to distribute heroin in Williston. The latter served 14 days in jail. Time served. So, once the judge accepted the guilty plea and laid down the sentence, she was released from prison.

And they say North Dakota is serious about illicit drugs. 

If you have nothing else to do, and I mean absolutely nothing else to do, you can be brought up to date regarding DAPL protests at this link. Deep into the article, this pearl:

An ebullient paralegal named Jess in gold eye-shadow and a floral skirt pointed out where the various camp areas had stood. She hadn’t returned to the site since the February eviction.

Nor had Dandilion Cloverdale, a sex worker and educator from Montana who now works for the Freshet Collective in North Dakota to coordinate travel and lodging for defendants. Cloverdale walked around solemnly, eyes streaming from the winds blowing sideways on the plains. “It’s sad coming back here, it looks so different” they said, adding “it’s hard,” a phrase I heard like a refrain that trip.

And yes, you can find a YouTube video featuring Dandilion Cloverdale.

What a great country.

I assume the "camp" looks "so different" is because it's been cleaned up at taxpayer's expense.