FIRST SHALE OIL DOMINO TO FALL: More to Follow
In a stunning news release, Continental Resources, the largest shale producer in the Bakken, is shutting in most of its production in the region. That is one hell of a lot of output to shut-in as Continental Resources was producing over 200,000 barrels per day in the Bakken at the end of 2019.
From the data on Shaleprofile.com, Continental Resources had over 2,200 wells in the North Dakota and Montana Bakken producing oil and gas during February this year. How many wells will Continental’s Harold Hamm shut in the Bakken?? And how many will be brought back online, at to what cost, when the market recovers??
According to Reuters, Continental Resources halts shale output, seeks to cancel sales:
April 23 (Reuters) – The largest oil producer in North Dakota has halted most of its production in the state, notifying some customers it would not supply crude at current pricing, according to people familiar with the matter.
Continental Resources Inc, the company controlled by billionaire Harold Hamm, stopped all drilling and shut in most of its wells in the state’s Bakken shale field, said three people familiar with production in the state. North Dakota is the second-largest oil-producing state in the United States after Texas.
This is terrible news for the U.S. Shale Oil Industry because $200 billion in debt is due over the next four years. How are they going to repay this debt if shale companies stop drilling and shutting in production??
If we look at the top five shale oil producers in the Bakken, Continental Resources was clearly ahead of the pack:
This chart from Shaleprofile.com shows that Continental Resources produced more than 200,000 barrels per day in the Bakken at the end of 2019. Hess, which is the second-ranked company, followed by a wide margin at 145,000 barrels per day. Interestingly, the third-largest producer in the Bakken is Whiting Petroleum that just filed for Bankruptcy on April 1st.
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