Where Are The Bakken Leaders Spending Money? Everywhere Else

Is The Bakken oil play dead in this low price environment? 

Continental Resources (CLR:NYSE) and EOG Resources (EOG:NYSE) were two of The Bakken pioneers.These companies were early movers in the play and amassed big, core land positions--and today have significant production.

The Bakken is what initially put these companies on the radar of investors.

You sure wouldn’t know that if you listened to their most recent earnings calls, or took some time to look through their corporate presentation.

The Bakken seems to be the last thing that these companies are interested in talking about.

That silence is screaming at us what the Bakken is worth at $45 oil.
 
It's hard for investors to imagine because The Bakken didn’t just transform North Dakota’s sleepy economy.The million plus barrels of daily oil production that it added impacted the global oil markets.Investors saw junior and intermediate producers from there get bought out for a total of tens of billions of dollars.It was The First Big Shale Oil Play--and a truly incredible story.

bakken production growth EIA Sept 16

Source: EIA

The growth of the oily Bakken, the gassy Marcellus and now the oily Delaware/Permian are the three biggest inflection points in US energy in the last decade.

But that was then, and this is now.And now it doesn't look so good for the Bakken

The Economics Don’t Compare

The industry now has four horizontal oil plays that can generate acceptable returns at $45 oil. 

The Midland Basin, Delaware Basin, Alpine High--all 3 of them in the Permian in SW Texas--and STACK in Oklahoma all now have economics at $45 oil that few thought the industry could ever achieve.

Continental has two oil weighted plays.One is the Bakken, the other is the STACK.Continental’s SCOOP is a liquids-rich gas play. 

It is the Bakken that--for now--dominates Continental’s production and cash flow.  

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Source: Continental’s Second Quarter Earnings Release

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