×

Waiting for another boom a bad tactic

Just a couple of years ago, the most common question being asked about the regional economy was something along the lines of “when will the Bakken come back?”

Some asked out of curiosity, other inquiries were weighted with hope. Answers ranged considerably, with perhaps the most common being that the energy sector was going to pick back up, but that the increased activity was not going to be anything nearly as dramatic as the Bakken boom.

Those still waiting for an explosion of activity are likely to be very disappointed. Statistically, the Bakken appears to be quite active in production terms; it just isn’t having anything close to the economic impact that the initial boom did.

In his monthly release of production numbers, Lynn Helms, Department of Mineral Resources, reported Friday that the state’s oil fields pumped 39,350,346 barrels of oil in July. That equates to 1,269,366 barrels per day. Both numbers are all-time highs for the state.

The previous mark for barrels per day was 1,246,355 which was set in May of this year. According to Helms, 96 percent of the production comes from the Bakken and Three Forks formations in the western part of the state.

Helms also reported a new all-time high for the number of producing wells in North Dakota with 14,972. That tops the record set in June 2018 of 14,778 wells.

Natural gas production has also reached an all-time high for the state. Statistics for July show 74,405,398 MCF captured, or 2,400,174 MCF per day. The previous daily record was 2,315,391 MCF.

Factoring into the still-tepid feel of the energy sector are low prices. Friday’s price of a barrel of North Dakota Sweet Crude was $57.50. The highest price ever paid for ND Sweet Crude was $136.29 in July 2008.

Additionally, energy producers are better prepared for a pick-up in activity this time around and don’t need to invest in initial infrastructure and other expenses related to the early stages of a boom.

The result is the “return” of the Bakken, but without the associated massive spike in economic activity. Many factors could influence that in the future, but for now it seems like banking on a vibrant restart of the activity the region experienced before is unlikely.

Hopefully that will influence both the questions being asked around the region, and the expectations.

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
   

COMMENTS