A Big Year Ahead For Bakken
(click to enlarge)
(Source: ND Pipeline Authority; Zeits Energy Analytics)
2013 is shaping up as a strong year for the Bakken, in contrast to 2012 when the play was hurting from skyrocketing drilling and operating costs, severe infrastructure bottlenecks, exploding basis differentials, and disappointing economics, forcing some operators to scale back their drilling plans. Looking forward, several positive factors are at work that should filter through to favorable year-on-year financial comparisons and contribute to a brighter outlook for the play in general:
- Crude oil takeaway issues have been largely resolved, with ample rail availability and major pipeline capacity additions expected in 2014-2016.
- Natural gas and NGLs should become increasingly bigger contributors to operators’ bottom lines as the build-out of processing and pipeline infrastructure is beginning to bear fruit and should catch up with production within next two years.
- Deeper Three Forks exploration is gaining