Bakken To Surpass Record Output Despite Bottlenecks

The latest ESAI Energy North America Watch indicates the Bakken shale basin’s associated gas production is rising at an even faster pace than the record-setting crude oil and condensate production. While crude oil production has increased by 19% over the same period last year, natural gas volumes have climbed by 29%.

The large increase in natural gas production is continuing to strain gas processing capabilities, resulting in North Dakota failing to meet its gas capture goals. Although processing capacity is being added by the end of this year, constraints on NGL takeaway will last into 2020 when a new long-haul NGL pipeline will be completed.

Crude and condensate production from the Bakken shale basin will surpass current record output into 2020, the ESAI Energy report said, noting that increasing rig productivity and efficiency gains in areas outside of the Bakken core are translating into high growth rates for the basin as a whole. Bakken production growth will add almost 250,000 b/d to total U.S. crude production over the next two years.

“Unlike the other major shale basins, the Bakken is still showing large gains in rig productivity,” ESAI Analyst Elisabeth Murphy said. “If this productivity is sustained, it will create better economics for production outside of the core, giving producers more confidence to drill and complete more wells during a volatile oil price environment.”