The Bakken: not dead, just resting

摘要

New technologies help this play enjoy sweeter dreams. One of the big questions in the investment community, according to Tim Rezvan, senior research analyst, Sterne Agee, is whether the Bakken is dead. After all, the Bakken play has seen a dramatic 51% plunge in rig count (down to 97 as of March 27), while operators are slashing capex and focusing on their core assets. Though production is still growing, it won't last forever. Curtailment could be felt as early as this summer. Assuming the Bakken rig count stays flat, production could roll over as early as July, with a 5% production decline from current volumes by the end of 2016, Gibson Scott, director, Energy Research at ITG Inc., told attendees at Hart Energy's DUG Bakken conference April 1. But, to paraphrase one of Monty Python's most famous sketches, the Bakken's not dead, it's just resting. Despite the dismal prices (WTI was at $49.95 at press time), there is reason to be optimistic. The futures strip predicts $60/bbl WTI by the middle of 2016 and $70/bbl WTI by mid-2018.