DENVER and HOUSTON, July 25,
2014 /PRNewswire/ -- Oil production from shale formations in
North Dakota and Texas increased by more than 33% in June,
according to Bentek Energy, an analytics and forecasting unit of
Platts, a leading global provider of energy, petrochemicals, metals
and agriculture information.
The production increase is most likely attributable to the rise
in returns producers are realizing in these basins, according to
Jack Weixel, Bentek Energy director
of energy analysis.
"Bentek estimates that internal rates of return on drilling and
carrying costs exceed 65% in the Eagle Ford and 50% in the
Bakken*," Weixel said. "To the average producer that means for
every $1 million they sink into
drilling a well, they can expect to recover at least $1.5 million in crude oil, liquids and natural
gas over the course of a year."
Crude oil production in the North
Dakota section of the Bakken shale formation of the
Williston Basin averaged 1.1
million barrels per day (b/d) in June, according to Bentek. This is
up 28.9% from the monthly average seen in June 2013. In another of the nation's predominant
oil shale plays, the Eagle Ford in Texas, production averaged 1.4 million b/d
last month, a 37.6% increase from June
2013, Bentek data showed.
"Prices of Bakken shale oil have been largely range-bound this
year, while prices of Eagle Ford shale oil have been on an upward
trajectory since the beginning of 2014," said Richard Capuchino, Platts managing editor of
Americas crude.
The Platts Eagle Ford Marker, a daily price assessment
launched in October 2012
and reflecting the value of oil out of the Eagle Ford Shale
formation in South Texas, is up
7.5% since January 1, with an average
price year to date of $104.43 per
barrel (/b). The marker has fluctuated between $98.29/b and $110.71/b year to date. The price of oil out of
the Bakken formation at Williston, North
Dakota, has ranged between $89.46/b and $96.59/b since January, according to the
Platts Bakken assessment. It reached a high of $96.59/b in mid-June before leveling off and
trading closer to the $92.78/b
average for the year.
The Platts Bakken, introduced earlier this
year, is a daily assessment of price for oil closest to
the wellhead prior to determination of transportation by rail or
pipe. The assessment reflects a sulfur content of 0.2% or less and
an American Petroleum Institute (API)** gravity of 42 or less,
similar to the nature of North Dakota Light Sweet crude.
The Platts Eagle Ford Marker reflects the
value of a median 47-API Eagle Ford crude barrel, based on the
crude's product yields and Platts product price assessments,
adjusted for U.S. Gulf Coast logistics.
Platts introduced the world's first independent daily price
reference valuing crude oil produced from a shale formation in
May 2010 when it began assessing
Bakken Blend shale oil injected into pipelines at
Clearbrook, Minnesota, and
Guernsey, Wyoming. Platts began
publishing its Platts Bakken assessment on April 22.
For more information on Platts price assessments methodology
visit these links: Details of Platts Bakken and Platts
Eagle Ford Marker. Bentek Energy's shale oil production
figures are derived from proprietary data models using publicly
available data. For more information on data models, reports
or Bentek's methodology, please contact
info@bentekenergy.com.
Platts will publish monthly updates via press release on Bakken
and Eagle Ford shale oil production and price data.
Visit this link to see the Platts May
2014 special report: Bakken: The King in the North.
* The Bakken formation spans North and South Dakota, Montana, Saskatchewan, Manitoba and Alberta.
** API gravity is a measure of how heavy or light a grade of crude
oil is compared to water.
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CONTACT
Kathleen Tanzy
212-904-2860
Kathleen.tanzy@platts.com
SOURCE Platts