In this list
Natural Gas | Oil

ANALYSIS: Bakken production forecasts expected to retreat this summer as DUC wells decline

Energy | Oil | Crude Oil

Platts Crude Oil Marketwire

Energy | Oil | Crude Oil | Refined Products

$90/b oil makes producers and refiners sanguine in Q3

Oil | Energy Transition | Energy

APPEC 2024

Metals | Energy | Energy Transition | Oil | Non-Ferrous | Renewables | Crude Oil

Fragmented markets from geopolitical conflict threaten to throw energy transition off track

Energy | Oil | Crude Oil

Dubai Crude Oil Price Assessment

Metals | Energy | Coal | Energy Transition | Electric Power | LNG | Natural Gas | Steel | Steel Raw Materials | Coking Coal | Emissions | Carbon | Electricity | Renewables

Commodity Tracker: 5 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

ANALYSIS: Bakken production forecasts expected to retreat this summer as DUC wells decline


Production to fall 400 MMcf/d by end of summer

Operators rely heavily on DUCs during rebound

  • Author
  • Brandon Evans    Rachel Wiser
  • Editor
  • Derek Sands
  • Commodity
  • Natural Gas Oil

Although Bakken natural gas production rebounded over the past year, volumes look to dip substantially during the summer despite higher oil-to-gas ratios and additional processing capacity due to reliance on drilled-but-uncompleted wells.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The large number of DUC wells and weaker flaring are unlikely to provide an upside risk to Bakken production much longer, according to a forecast by S&P Global Platts Analytics. When WTI prices fell as low as minus $36.98/b in April 2020, Bakken production declined from 2 Bcf/d the 30 days before to 1.5 Bcf/d the 30 days after and eventually reached 1.5 Bcf/d in May and June 2020.

Platts Analytics expected a brief recovery before production declines again, thanks to a lower number of rigs. The basin instead capitalized on hundreds of DUCs when prices collapsed in April 2020, allowing for stronger well completion rates than drilling rates. From May 2020 through April 2021, the number of Bakken DUCs dropped from 877 to 647, according to data by the US Energy Information Administration.

Flaring rates in the Bakken also fell from 13% in March 2020 to 8% in February 2021, providing additional gas that previously would have been flared, according to the North Dakota Industrial Commission. It fell further to 6% in March and has averaged 7% over the past six months. The figure would be closer to 6% barring the February winter storm, which disrupted gathering and processing infrastructure.

However, these forces are unlikely to maintain production growth as the basin runs out of wells without more drilling activity or the capacity to reduce flaring further without new infrastructure. Platts Analytics therefore expects production to slide from 2.1 Bcf/d at the start of summer to 1.7 Bcf/d by October. The EIA expects Bakken production to decline 55 MMcf/d month over month in June.

North Dakota's rig count stands at 18, up from 15 in February and March. The Williston Basin averaged 54 active rigs in February 2020, according to Enverus.

NDIC director Lynn Helms does not expect the rig count to rise much this year before a stronger recovery next year. North Dakota drilling permit activity is slowly increasing but remains volatile due to oil price uncertainty, Helms also said in his May report.

Operators are maintaining a permit inventory of about a year. Helms expects oil supply and demand to return to balance by 2022, once the global overhang of some 77 million barrels in storage are worked through.

However, midstream operator Oneok sees possible upside to Bakken production throughout the remainder of 2021, even with much lower year-over-year rig counts.

"There are 350 DUC wells on our dedicated acreage," said Oneok's chief operations officer Kevin Burdick, during the company's April earnings call. "With 10 completion crews there is no need for additional drilling or completion crews to maintain our volumes throughout the year. Any additional activity would provide upside."

The company is moving forward with its 200 MMcf/d Bear Creek natural gas processing plant expansion in the Williston Basin, which is slated for completion in the fourth quarter of 2021.

North Dakota oil producers flared 184 MMcf/d during March, according to the latest NDIC data.