What’s Next for M&A and New Tech in the Bakken?

The Bakken shale formation in the Williston Basin has seen significant growth in production over the past decade, thanks to the utilization of horizontal drilling and fracking techniques by various operators. However, as the formation continues to mature, the future of production growth lies in enhanced oil recovery (EOR) and the development of more advanced drilling techniques. Improved pipeline capacity will also play a crucial role in supporting future production levels.

Despite the rapid growth in production seen in the past, recent data suggests that oil production from the Bakken peaked in 2019 and has not returned to the same levels since. Similarly, gas production reached its peak in late 2023 and has plateaued since then. This trend has led operators to explore mergers and acquisitions (M&A) opportunities to streamline operations and reduce costs. Additionally, new drilling technologies and well designs are being implemented to make lower-tier inventory profitable in the current market conditions.

One notable merger that took place last year was between Chord Energy and Enerplus, creating a significant player in the region. Chord Energy’s strategic plan is to maintain oil production volumes of the merged assets at 2024 levels from 2025 to 2027 with an annual capital expenditure of $1.4 billion. CEO Danny Brown highlighted the positive impact of this merger on capital efficiency and expressed confidence in the quality and depth of their inventory. Vitesse Energy, another key player in the Bakken region, acquired Bakken producer Lucero Energy as part of its M&A strategy to support production levels without heavy capital investments, leading to increased free cash flow.

As the industry looks toward the future, optimizing operations and adapting to changing market conditions will be crucial for sustained success in the Bakken region. Advanced drilling technologies, such as those seen in the Eagle Ford region, have the potential to further boost productivity and efficiency in the Bakken shale. By remaining open to new technologies and strategic partnerships, operators in the region can navigate the challenges of a maturing formation and evolving market dynamics to ensure continued growth and profitability in the years to come.