The prolific oil play in the Bakken Shale has experienced one of the larger falls from grace in the industry over the course of the now two-year slump in commodity prices, where oil fell to below $30 per barrel (bbl) in early 2016.

While drilling activity has been drop-ping substantially since early 2015, production has seen a less drastic, steady decline of approximately 200,000 barrels of oil equivalent per day (boe/d) through-out 2016, with average total Bakken production slumping to 1,200 Mboe/d. At press time, Bakken output was 972 Mboe/d. Sinking legacy production, coupled with fewer new wells coming online, accounts for the declines the play experienced in 2016.

The rising number of drilled but uncompleted wells (DUCs) in the Bakken mirrors the situation of the majority of other North American shale plays from the time commodity prices plummeted in late 2014. Shortly after WTI hit its floor of $30/bbl in February 2016, the DUC count reached its peak of 870 wells, about a 45% increase from the number of DUCs accounted for in early 2014.

However, with a slight resurgence in oil prices that spent the majority of the summer months hovering between $45 and $50, completion activity began to pick up, and inventories fell to their lowest levels toward the end of the year.

Technological advancements in the Bakken, as well as throughout the U.S., have led companies to a more effective and efficient path when exploiting oil and gas reserves. Drilling cycle improvements have steadily increased, with companies reducing drill times by more than 50% compared to 2014 operations.

Enhancing completion designs by shortening frack stage lengths, while adding more stages, and pumping more proppant has boosted well production and EURs that have ultimately kept producers alive. These improvements, along with relief from service contractors, have helped reduce overall Bakken well costs, which have decreased to approximately $6 million from as high as $9 million to $10 million when oil prices were $100/bbl.

Overall, the Bakken has experienced an 8% decline in production on a per boe basis, which is heavily influenced by crude oil production.

Stratas Advisors forecasts the average production rate for the Bakken will continue to decline through 2018, with growth expected to return to the basin sometime in 2019. During this time, oil prices are anticipated to remain more stable and above breakeven rates for much of the core acreage in the Bakken.

The lift in prices is projected to drive capital investments back to the Bakken, which gained traction as the second-most prolific oil play in the U.S. behind the Permian Basin prior to the price collapse. Continental Resources Inc., Whiting Petroleum Corp. and Hess Corp. are expected to continue to lead development in the region based on current acreage and plans for increased activity in 2017.

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