Crude Energy Leading the Way in the “New Bakken”

The tight oil boom in the United States is a well-worn story, and it is difficult to find oil and gas companies that have huge growth prospects but are not yet household names. And as the skyrocketing growth rates in oil and gas drilling start to slow, some companies are facing an uncertain future. In fact, Bloomberg recently reported that many mid-sized shale companies are experiencing financial trouble, having taken on debt at a faster rate than production justifies.The key to avoiding such an outcome is to keep costs low. In the Bakken, with so many companies bidding up acreage, along with a shortage of key infrastructure, it can be very expensive to drill a typical well. If production rates can’t compensate for that upfront cost, drillers may have to cut back.But not all shale plays are so expensive. The Mississippi Lime formation, located in Oklahoma and Kansas, offers an alternative. Although still an obscure area to the public and even some energy watchers, the play has seen an uptick in drilling activity in the last two years. From February 2012 to 2013, rig counts jumped by 53 percent to a total of 92.Some locals have begun calling the area the “New Bakken”. They may be getting ahead of themselves, but the sentiment suggests there is a great deal of optimism surrounding the play. That is because the formation is shallow, allowing for drilling to be completed quickly and cheaply – and at a bargain compared to the Bakken. And because of the low-cost, small and medium-sized independents are dominating the drilling activity, with Shell being the only major in the area.

via Crude Energy Leading the Way in the "New Bakken" – MarketWatch.

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