We offer a preliminary assessment of the sensitivity of Bakken oil production to a variety of factors using the model from Ikonnikova et al (2017). The oil price is probably the single most important factor that can drive cumulative Bakken production (2015–2045) up or down as much as 50%. Other factors such as the implementation of technology that can reduce costs, increase productivity, or both also impact the production outlook but less than the oil price. However, these factors require further investigation to confirm the reasonableness of the ranges we tested, and, more importantly, to better represent the interactions among costs, productivity, and the oil price. Scenarios that combine multiple factors and capture these interactions are likely to yield more realistic outlooks.
The Bakken play has been one of the major contributors to U.S. oil production growth although the active development started only in the second half of the 2000s, encouraged by historically high oil prices through 2008 and building on the success of unconventional drilling in other plays. The introduction of horizontal drilling and hydraulic fracturing technologies allowed operators to increase production in Bakken, where limited conventional development have been pursued for a long time. The temporary drop in the oil price in 2009 did not have much impact on drilling activity but the collapse of the oil price in late 2014 and sustained low prices stopped production growth by mid-2015.
The play economics and potential future development in Middle Bakken and Three Forks horizons was analyzed in another study by our team presented in this conference (Ikonnikova et al., 2017). The present study subjects the base production outlook to some sensitivity testing. All of these results should be considered preliminary as we continue with our analysis as more data becomes available and we test more sensitivities. Key factors that are discussed in this abstract are prices and costs.
