Is The Bakken Upside Capped? Another Look, Six Months Later -- June 16, 2018

Re-posting:

From The Bismarck Tribune:

North Dakota oil production jumped 5.4 percent in April to more than 1.2 million barrels per day, coming in just shy of the state’s record.

Director of Mineral Resources Lynn Helms called it a big surprise to see production levels within 2,500 barrels of the all-time high of nearly 1.23 million barrels per day.

“We were not expecting that kind of a surge until late May, early June,” Helms said Friday while discussing the preliminary figures.

Natural gas production increased 7.4 percent in April, setting another record at more than 2.24 billion cubic feet per day.

Do you remember this absurd BTU Analytics article? I'm not sure I ever posted the link; the article was simply too absurd. Or maybe I did post the link before but I can't find it now. Whatever. From the linked absurdity:

The recent announcement of Oasis Petroleum’s Delaware Basin acquisition marks another major Bakken producer re-positioning to focus its growth capital outside the Williston Basin.

What do these shifts signal about the future of the Williston Basin?

By choosing to look for growth elsewhere, Oasis answered two related questions: how it plans to increase its inventory of ‘premium’ well locations as well as where the company views its best opportunity for low-cost production growth.

Because one of the largest Bakken pure plays chose this route, does it mean that Bakken upside is capped?

One concern mentioned by Bakken naysayers is that ‘premium’ inventory is running low, particularly compared to the opportunity set in other basins. BTU developed a new, well inventory model using the actual location of previously drilled wells, along with spacing, lateral and drainage assumptions to calculate remaining locations in each major shale basin, as featured in the most recent E&P Positioning Report.

The chart below shows the remaining locations in the Bakken by breakeven band compared to BTU’s forecast for well completions in the basin. In addition to having less than 250 remaining locations that breakeven below $30/bbl wellhead, more than 70% of locations that breakeven below $50 will be exhausted over the next five years.

Screenshots from the article: