As the oil price slump continues, investors are hunting for bargains on the hope they will eventually profit from the nation’s second largest oil play, reports the Wall Street Journal (WSJ).
According to state data, hundreds of wells have been bought and sold in recent months. Those placing bets on long term profitability in the Bakken range from major O&G players to first time buyers. In November last year Anadarko Petroleum CEO Al Walker told Reuters, “We’ve not really seen good distressed assets make their way into the market.”
In the time since, however, there have been various assets changing hands across the nation. In one of the largest exchanges to happen in North Dakota, Occidental Petroleum Corp. sold all its Bakken assets to private equity firm Lime Rock Resources for $600 million. Also late last year, Whiting sold a collection of wells to NP Resources LLC, according to the WSJ.
Amidst the asset sales there have also been several companies filing for bankruptcy protection, illustrating the continued high costs of operations in the remote North Dakota oil patch. The state’s largest oil producer, Whiting Petroleum, is among the ranks of operators waiting for prices to reach the $60 to $70 per barrel range before activity continues.
But as oil prices settled around the $50 mark yesterday, activity remains in a lull. As of Wednesday June 8, North Dakota had only 26 active drilling rigs. Four years earlier there were 214. To read more about buying and selling assets in the Bakken, read the full WSJ article here.