The Bakken oilfield in North Dakota, the birthplace of America’s oil boom a decade ago, is struggling to recover from last year’s market crash even as crude prices have surged back to $80 a barrel.
It reflects a broader slowdown in growth from America’s oil patch as companies keep spending low in a bid to redirect the windfall of cash from higher prices back to shareholders. But analysts say the Bakken faces a bleak future after years of intensive drilling.
Oil producers in the Bakken are now running into the “geological reality” that after a decade of rapid development “most of the best wells have been drilled”, said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis. “It helps to explain why the industry in the Bakken is sort of flatlined. ”
The dwindling number of high quality wells left to drill — those that can produce high volumes of oil for relatively low cost — will make it difficult for Bakken producers to get output back to pre-pandemic levels, said Williams-Derry.