[Editor's note: This story originally appeared in the April 2020 edition of E&P. Subscribe to the magazine here.] 

Limited takeaway capacity, industry concerns over regulatory restrictions and low commodity prices are combining to suppress production growth and operator enthusiasm in the Rockies and Bakken region.

According to the U.S. Energy Information Administration’s (EIA) monthly “Drilling Productivity Report,” oil production in the Bakken remained mostly flat in 2019, while the gassier Niobrara saw only modest gains in natural gas production. The EIA’s report revealed oil production in the Bakken hovering around 1.4 MMbbl/d, while gas production in the Niobrara held steady at about 12.5 Tcf/d.

Although natural gas breakevens in the Rockies and Bakken are higher than commodity prices, Enverus expects any production gains operators might see will likely come from their oil plays.

In its recent “FundamentalEdge Report: Rockies & Bakken in Focus,” Enverus reported that the low-growth outlook will likely remain throughout 2020, but better days could be on the horizon as planned pipeline expansions come online sometime next year.

“Like all U.S. basins, the Rockies and Bakken are expected to slow down due to lower prices and pipeline takeaway constraints, but that doesn’t mean there aren’t some glimmers of hope,” said Jesse Mercer, senior director of crude market analytics at Enverus. “Operators that continue to scrutinize cost savings, efficiencies and prioritization of crude oil over gas will fare better than others.”

While most companies are reporting plans to maintain fl at production in the Rockies and Bakken, some are planning growth, such as Devon Energy, EOG Resources, Marathon Oil and Hess. According to its third-quarter 2019 investor report, Devon is planning to potentially double its Niobrara activity this year.

Source: Enverus
Line pressure and takeaway issues negatively affected the Denver-Julesburg (D-J) Basin in summer 2018. Most of those issues have been resolved, as reflected in the production increase in 2019. The Williston Basin was impacted by the 2016 downturn, but it has since rebounded and has been in a growth mode. (All charts courtesy of Enverus)
Source: Enverus
Lateral lengths have steadily increased from 5,883 ft in 2015 to 9,243 ft in 2019, a 57% increase. Proppant and fluid intensities also have increased, although at a lower rate than lateral length.
Source: Enverus
Lateral lengths in the Powder River Basin have increased significantly from 5,700 ft in 2015 to 9,146 ft in 2019, a 60% increase. While proppant intensity has seen significant increases, fluid intensities have declined since 2016.
Source: Enverus
Completion methods in the Williston Basin have remained relatively consistent over the past five years. Lateral lengths have remained mostly unchanged, and both proppant and fluid intensities increased up until 2017 and have since slightly declined.