Production from the Bakken shale in the Williston Basin grew rapidly in the last decade, with horizontal drilling and fracking techniques pioneered by a number of operators.
As the formation matures, production growth will likely be dependent on improved pipeline capacity and the development of even more advanced techniques such as Enhanced Oil Recovery (EOR).
The reality is top tier inventory is depleting, and oil production is plateauing. Oil production peaked in 2019 and has not recovered to the same level since. Gas production peaked in late 2023 but has plateaued since then.
Operators are pursuing M&A opportunities, as well as new drilling technologies and well designs, to reduce costs and make lower-tier inventory profitable.
Content for this insight was researched using Evaluate Energy Documents.
M&A
Source: Evaluate Energy M&A
The merger of Chord Energy and Enerplus last year created one of the largest players in the region. Chord’s plan is to keep oil production volumes of the merged assets flat on 2024 levels from 2025 thru 2027, with an annual capex of $1.4bn.
“This outcome is a material improvement in capital efficiency and illustrates the quality and depth of our inventory,” said CEO Danny Brown in the firm’s third quarter results [i].
Vitesse Energy — which acquired Bakken producer Lucero Energy [ii] — says its strategy of M&A transactions is helping keep production flat with limited capex, supporting free cash flow.
TXO Energy — which closed its acquisition of Kaiser-Francis Oil Company and is pursuing a deal to purchase assets from Eagle Mountain Energy Partners [iii] — says its strategy of pursuing ‘accretive opportunities’ helps generate cash flow through efficient operations, which drives dividend distributions. [iv]
If and when Chevron closes its acquisition of Hess, the firm will operate 465,000 acres of inventory in the Bakken. The Hess assets in the Bakken saw net production rise 7% to 208,000 boe/d in the fourth quarter of 2024, primarily reflecting increased drilling and completion activity. [v]
Chevron has not outlined the synergies it expects to achieve with Hess’ Bakken operations, but says it expects company-wide synergies to be as high as $1bn before tax within a year of closing.
Similarly, ConocoPhillips is eyeing strong benefits from its acquisition of Marathon Oil’s Bakken assets and says the region will drive ‘solid’ free cash flow.
Longer laterals and well spacing
Longer laterals and adjusting well spacing are two techniques most commonly used to improve drilling efficiency. The Bakken formation is a laterally extensive, continuous tight oil formation, making it well suited to long lateral wells. Furthermore, well-to-well interactions in the Bakken shale stand out compared to other shales. Whereas frac hits from infill drilling generally hurt production in older parent wells elsewhere, they often improve it in the Bakken.
Chord Energy is drilling a number of three-mile laterals. The firm has reduced drilling costs [vi] for three-mile wells by 8% over the past year. Three-mile laterals now cost 20% less per lateral foot drilled than two-mile laterals.
The firm drilled its first four-mile lateral in the fourth quarter of 2024, offering the potential to reduce the costs of production even further. Other firms, such as Continental Resources, a major player in the region, are also looking at four-mile laterals.
Refracs and U-turn wells
Refracs have been deployed in the Bakken to enhance production at existing wells.
Devon Energy is now carrying out refracs on Bakken assets acquired from Grayson Mill. Conoco-Phillips also sees “significant upside potential” for refracs on its acquired Marathon acreage.
Some operators are also drilling wells where the wellbore follows a U-shaped trajectory rather than a straight line. These wells can re-enter old reservoirs, bypass faults, or access deeper formations, and in some cases match the performance of conventional wells.
Improved capital efficiency
These improved techniques have helped producers improve capital efficiency. Chord Energy, in particular, has improved capital efficiency through low base declines and improved well productivity rates.
Source: Chord Energy February 2025 Investor Presentation [vii] – Available via Evaluate Energy Documents
Northern Oil and Gas said in its March investor presentation that productivity from its Williston Basin wells continues to improve.
Source: Northern Oil & Gas March Investor Presentation [viii]- Available via Evaluate Energy Documents
ConocoPhillips said in its most recent results that its Bakken assets would move to an optimum plateau, maintaining the same amount of production while rationalizing rig and frac crews, and pursuing longer three-mile lateral drilling opportunities.
Devon Energy says its current levels of capital efficiency allow it to sustain its acquired Bakken assets from Grayson Mill at approximately 100,000 boe/d in 2025 with a disciplined capital program. [ix]
Takeaway options
North Dakota regulators are calling for greater use of enhanced oil recovery (EOR) and more gas takeaway solutions to move natural gas out of the Bakken to allow additional headroom for growth in oil production.
“We need to move our gas, and we must work with industry to build out pipeline infrastructure,” said North Dakota governor Kelly Armstrong in his State of the State address earlier this year.
Intensity Infrastructure Partners recently announced the launch of an open season to determine levels of support for the construction of a 1.5 bcf/d pipeline from the Bakken to facilitate the growth of a data center industry in the region.
Devon Energy CEO Rick Muncrief also cited North Dakota as a potential location for data centers in September last year at the North Dakota Petroleum Council’s (NDPC) annual meeting, but the region will face competition from more established areas such as Northern Virginia and Texas.
Long term prospects
The Bakken has a higher oil to gas ratio offering fewer midstream constraints and lower decline rates as a result. This oil-weighting means its prospects are fairly solid in the near term.
“50pc of our production is oil but at today’s prices it drives about 90% of revenues. So when I think about the Williston Basin, I think it’s going to continue to drive margins for companies for a long time,” said Devon’s Muncrief at the NDPC annual meeting last year.
The availability of acreage with refracturing opportunities at relatively low prices, and the fact that a large number of small private producers still operate in the Bakken, make it a good candidate for further M&A over the next few years.
However, March’s Short-Term Energy Outlook from the EIA forecasts that oil production from the Bakken will rise slightly at the end of 2025, before falling in 2026, while gas production stays relatively flat.
North Dakota’s chief oil regulator Lynn Helms last year said the state’s oil production was in danger of falling into “terminal decline” by the mid-2030s without the deployment of EOR techniques using CO2.
Pilot EOR projects carried out by Hess, EOG and others in the Bakken demonstrate that the technology has good potential to improve production.
Chord Energy began an 18-month project last year to assess the potential for CO2-enhanced oil recovery.
The technology is likely to need an improved policy support regime, including tweaks to 45Q tax credits, in order to become commercially deployed on a widespread basis.
Depletion
Estimates of depletion rates vary widely, and depend on oil and gas prices, drilling rates and investment. Devon Energy [x] and ConocoPhillips both say they have about 10 years of inventory in the Bakken at current activity levels.
Content for this insight was researched using Evaluate Energy Documents.
Source Information
i. Chord Energy Reports Strong Third Quarter 2024 Financial and Operating Results – Access here (EE Documents subscribers)
ii. Vitesse Energy Announces Acquisition of Lucero Energy – Access here (EE Documents subscribers)
iii. TXO Partners Announces Williston Basin Acquisitions – Access here (EE Documents subscribers)
iv. TXO Partners Declares $0.61 Distribution on Common Units for Q4 2024 – Access here (EE Documents subscribers)
v. Hess Corp Reports Q4 2024 Results – Access here (EE Documents subscribers)
vi. Chord Energy February 2025 Investor Presentation – Access here (EE Documents subscribers)
vii. Chord Energy February 2025 Investor Presentation – Access here (EE Documents subscribers)
viii. Northern Oil & Gas March 2025 Investor Presentation – Access here (EE Documents subscribers)
ix. Devon Energy Announces Strategic Acquisition in the Williston Basin –Access here (EE Documents subscribers)
x.Devon Energy Announces Strategic Acquisition in the Williston Basin –Access here (EE Documents subscribers)
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