A little on the Profitability of the Bakken

9 Oct 2017   Shale Oil

In the first part of this post I present an update on the profitability for Light Tight Oil (LTO) extraction in the Bakken (ND) as one big project. This is followed with economic life cycle analysis for the average LTO well of the 2014, 2015 and 2016 vintages in the Bakken. This analysis found that companies in aggregate continue to outspend net cash flows from operations and for 2017 this is now expected to total $2 – $3 Billion. The strong growth and sustained high LTO extraction from the Bakken were facilitated by considerable amounts of debts. The growth in total debts outstanding (employed capital) continues to grow, albeit at a slower pace. With oil prices sustained at present levels the total employed capital (primarily debt) constitutes severe obstacles for the profitability for the Bakken. In a scenario where no wells were added post 2017 and the wellhead (at […]

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