Continuing with our NGL Benchmarking series, this month let us take a deep dive into another key basin – the Bakken. A drop in crude prices due to the COVID19 and OPEC price war has hit Bakken shale basin hard, with ~0.7 Bcf/d and ~0.4 Million Bpd drops in gas and oil production, respectively, since Dec 2019. This has also impacted NGL production out of the Bakken. Will Bakken regain its glory any time soon? The uncertainty on DAPL’s future has added one more wrinkle to the situation…

Where we have been to where we are:

Drilling activity in Bakken has drastically slowed down, with rig count dropping from the highs of 53 in Jan-2020 to 10 today, according to Baker Hughes. We’ve seen this story before: from late 2014-early 2015, we saw a big dip in the crude oil price followed by falling rig counts in the basin. The Bakken rig count (and crude oil prices) never fully recovered to pre-2014 levels, stabilizing around 50 rigs on average. Current oil prices appear stable at around $40/Bbl although we have not yet seen any recovery in drilling activity.