Bakken Production Down 4.6% Over 2014

Bakken EIA

For the first time in more than a decade, Bakken's oil production is showing a year-over-year decline.

Related: OPEC’s Plan to Squeeze out U.S. Shale: Is it Working?

Thanks to the shale oil boom, the Bakken region has experienced years of unprecedented growth with each year dwarfing the year before. But things have changed since oil prices crashed one year ago.

The U.S. Energy Information Administration (EIA) released their latest drilling productivity report showing production across all the shale basins are in decline. The report estimates that in October 2015, the Bakken Shale produced 1.16 MMbpd (million barrels per day) of crude oil—1.8% less than the production levels in September 2015 and 4.6% lower than production was one year previously. This is the first time in over a decade that the production trends have gone backward. have reversed.

Related: Marathon Oil Shifts Focus to U.S. Shale

Total oil output from major U.S. shale regions is expected to fall by 118,000 barrels a day to about 4.95 million barrels a day in December. State data shows that North Dakota produced 1.11 million barrels a day in September, down 1.1 percent from the same month a year ago.

To stay afloat, oil and gas producers release have had to scale back drilling operations and delay completing new wells. The full impact is being seen as companies release third quarter financial results this month that show huge losses, layoffs and budget cuts for many.

For more information go to eia.gov

Investment Opportunity in the Bakken

AJK Holdings is now offering for sale J&J Apartments-Highland Court, a 27 unit apartment building in New Town.

The property is located in the Bakken Center Oil Region on Hwy 23 East and is one block from downtown.

The apartment building is currently 100% leased and includes the following features:

• A mix of 1, 2 & 3 bedroom units
• Currently 100% leased
• Garages
• Land 300'X300' frontage access road
• Parking

The property is being offered at

$1,700,000 

• $350,000 down
• 20 yr. AM/7yr Balloon
• 65% cash on cash return/12 cap rate
• Owners will carry a Contract for Deed at 6%.

• Inspection report is completed for this property and broker participation welcome

Contact

Tony Krejci AJK Holdings, Inc.

(651) 402-1239

Bakken Bankruptcies on the Rise

More Bakken Bankruptcies

More energy companies are exiting the Bakken Shale Play as they struggle to adapt to the prolonged low oil prices.

Related: Occidental to Leave the Bakken

Samson Resources and American Eagle Energy plan to sell off their Bakken assets in order to pay back what they owe as part of a restructuring under Chapter 11. These companies are among almost two dozen oil and gas companies who have succumbed to the stress of low crude prices by filing for bankruptcy in the past year.

Samson Resources Corporation filed in mid September after selling off 400,000 acres in the Bakken to Continental Resources for $650 million. Potential debtors have until November 20th to make a claim against the company.

“The steps we are taking will allow our company to maximize future opportunities and compete more effectively with significantly less debt on our balance sheet,” Samson CEO Randy Limbacher said in a statement. “We fully expect to operate our business as usual throughout this process and to emerge as a financially stronger company.”

American Eagle Energy listed $215 million worth of liabilities and nearly $212 million in assets in its bankruptcy petition. The company had focused on oil drilling in the Bakken Shale in North Dakota and had reduced to 19 employees by the early part of 2015.

Other companies that have filed this year include:

• Quicksilver Resources Inc.
• Sabine Oil & Gas Corp. (July 15)
• Hercules Offshore Inc. (Aug. 13).
• Cal Dive International Inc. (March 3)
• Dune Energy Inc. (March 8)
• BPZ Resources Inc. (March 9)
• ERG Intermediate Holdings LLC (April 30)
• Saratoga Resources Inc. (SARAQ) (June 16)
• Milagro Oil & Gas Inc. (July 15)
• Miller Energy Resources Inc. (Oct. 1)

North Dakota Well Under Control

Well Blows in North Dakota

Oasis Petroleum reported today that it was finally able kill a well that blew out over the weekend in North Dakota.

Related:Bakken Oil Safety

CNBC is reporting that the well leaked more than 67,000 gallons of oil, causing law enforcement to close several roads around the site due to concerns about the effects of leaking gas.

The well is located in Mountrail County about 15 miles south of White Earth. This is one of the more prolific oil-producing regions in Bakken, with nine oil and gas rigs running in this county alone.

The cause of the blowout is still under investigation, but state officials suggest that it may have been caused by hydraulic fracturing of a nearby well in a situation referred to in the industry as "communication" between wells. Oasis worked all weekend to regain control of the well, which blew in the morning on Saturday, Oct. 17.

There was initial concern that the explosion might endanger a tributary of the Missouri River as oil was carried by a light wind to the White Earth River.

Oasis Petroleum is an independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources and has approximately 506,000 acres in the Williston Basin.

Occidental to Leave the Bakken

Occidental Sells Bakken Assets

Occidental Petroleum Corp. will be leaving the Bakken as it sells its North Dakota oil assets

Related: Occidental Petroleum Reduced 2015 Capex by 33%

The reported $500 million deal includes the sale of approximately 300,000 acres and a 21,000 square-foot regional office complex to Lime Rock Resources. Most of Occidental's acreage is located in Stark and Dunn counties, which have not been producing like other Bakken counties, such as McKenzie.

Reuters reports that Occidental's executive vice president and named CEO Vicki Hollub is downplaying the value of the company's Bakken assets. She commented that North Dakota "just can't compete with our Permian Basin (Texan) assets and we don't think it ever will, so we do want to monetize it."

Occidental Petroleum Corp, the fourth-largest U.S. oil producer, is the first major oil company to exit the Bakken region since the oil price slump.

Just one year ago, wall street estimated a sale of Occidental's Bakken Shale assets would easily fetch a $3 billion. But oil has fallen by half since then and the company needs the cash, which caused them to sell at 'bargain basement prices'.

Occidental made history in May when it named the first woman ever to lead a major U.S. exploration and production company.