Published: March 4, 2016 |

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[Click image to enlarge]

Two of the largest oilers are to abandon swathes of projects in an area, which was one of the biggest drivers of the US shale boom.

It marks another milestone in the cooling of the once booming US shale boom that has stirred up the balance of power at the center of the current oil price collapse.

And, it is precisely the kind of news that many in the Middle East, and OPEC, have been hoping to hear whilst they’ve been resisting calls to cut production.

Continental Resources and Whiting Petroleum are both halting projects in the Bakken shale, which spans North Dakota and other parts of America’s Midwest.

Continental, which has unveiled its first loss since becoming a public company in 2007, told investors it will defer most well completion previously planned for the Bakken in 2016.

More than half the group’s output comes from the Bakken - about 135,000 of 225,000 barrels of daily production - and it intends to keep four drill rigs operating through to year end, but, no fracking crews would be deployed.

At the same time Whiting Petroleum, which produces some 128,000 barrels a day (83 percent of its business) from the area, revealed it would be leaving more than 70 drilled un-complete, without fracking.

It is suspending these operations in a bid to cut annual capital costs by 80 percent, down to $500mln for the year. Whiting says the decision will see it have a ‘capital efficient’ way to resume growth if oil prices rebound.

Elsewhere, there in the US shale industry there were further warning shots with reports suggesting that the ‘biggest wave’ of debt defaults from oil companies was looming.

Substantial portions of the shale boom was propped up with ‘junk’ debt, as drillers borrowed from investors to rapidly drill, frack and produce from US shale resources.

Crucially, these loans have been pinned to production revenues but also in-the-ground reserves, which have now been massively devalued.

As oil prices have capitulated, and as many fields have become uneconomic, this securitized debt increasingly appears as a concern and a potential source of ‘contagion’ for the broader financial system.

Today, crude prices were steady after Wednesday’s statistics from the US Energy Department showed a 3.5mln barrel rise in American crude stockpiles.

Whilst not in itself positive, the weekly increase in inventories was actually only half as bad as Tuesday’s 7.1mln barrel build as reported by the American Petroleum institute the day before.

In London trading, Brent crude was down 0.8 percent to US$34.15 a barrel while West Texas Intermediary futures dipped 0.7 percent just below US$32 a barrel.

Source: (February 26, 2016) Proactive Investors

About Continental Resources
Continental Resources is a top 10 independent oil producer in the U.S. Lower 48 and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation’s premier oil field, the Bakken play of North Dakota and Montana. The Company also has significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. In 2016, the Company will celebrate 49 years of operations.

To stop by Continental’s website, CLICK HERE

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