Bakken Shale oil producers are under pressure to scale back 2015 drilling plans due to falling oil prices, according to Bloomberg. On October 13th, Houston-based Plains Marketing L.P. listed Williston Basin sweet crude at $67.69, which is a ~$4 drop from last week's price.
Crude oil prices have been on the decline worldwide. Surging production from U.S. shale plays are one of the reasons behind the worldwide oil price drop. Other factors include a weakening global demand for oil and an increase in Libyan oil drilling over the summer, according to the Energy Information Administration (EIA).
North Dakota’s Department of Mineral Resources (DMR) Director Lynn Helms updated lawmakers on the status of oil & gas development in the state last week. Helms said two factors could negatively impact oil production – lower oil prices and new flaring regulations.
Read more: Bakken Development Threats on the Horizon
Lower prices doesn't mean production growth will stop in North Dakota for the immediate future. In April of 2014, consultancy Wood Mackenzie, predicted the play will hit 1.7-million b/d by 2020. Currently, oil production in North Dakota is ~1.1-million b/d.
Growth in the Bakken region has been marked by a sharp up tick in infill drilling and pad drilling to increase efficiencies and the recovery of hydrocarbons. In January of 2010, just a few years after the boom began, there were about 4,600 producing wells in North Dakota. Now, there are more than 11,000 producing wells in the state.
If oil prices remain low or stay flat, operators will scale back drilling across the Bakken. Look for operators to focus mostly on the sweet spots in core areas located in McKenzie, Williams, Mountrail and Dunn Counties.