Bakken Oil Report Fall/Winter 2021 by DEL Communications Inc.

FALL/WINTER 2021

Cerilon to build $2.8-billion GTL plant in Williams County

North Dakota perseveres in powering the world

Zeroing in on energy in oil and gas

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CONTENTS

Message from the editor, Shayna Wiwierski..................................................................... 6 Message from North Dakota Senator John Hoeven....................................................... 12 North Dakota making a push for clean energy................................................................. 14 Burgum, Commerce announce ND Development Fund support for Cerilon to build $2.8B gas-to-liquids plant................................................... 16 North Dakota Development Fund supports sustainable oil and energy, carbon neutrality....................................................................................... 18 North Dakota perseveres in powering the world............................................................. 19 Amid worker shortage, BSC offers growth for employers, employees.......................... 20 Shale 3.0: Fast track economies of scale with digitalization and analytics.................... 21 President Bison reverses "America First" energy policies and resorts to begging OPEC and Russia.............................................. 24 Zeroing in on energy in oil and gas.................................................................................... 26 Williston Basin Petroleum Conference 2022 has renewed focus on all energy from the Earth............................................................. 28 Canadian provinces shut out of top 10 most attractive jurisdictions in North America for oil and gas investment.............................................. 29 Protecting profits in the new oil economy......................................................................... 30

Managing Editor SHAYNA WIWIERSKI shayna@delcommunications.com Sales Manager DAYNA OULION dayna@delcommunications.com Advertising Account Executives COLIN JAMES MIC PATERSON ANTHONY ROMEO Contributing Writers AHSAN JAVED DAN KISH RON NESS DAVE SAVELLE AKASH SHARMA BROOK THALGOTT Production services provided by: S.G. Bennett Marketing Services Creative Director / Design KATHLEEN CABLE

Enbridge responds to Canada Energy Regulator decision to deny Mainline contracting............................................................................... 32

Cover photo courtesy of MTE CORP.

Nodak Oilfield Services expands into flare mitigation technologies with EcoVapor............................................................................. 33

Oil and used equipment...................................................................................................... 34

INDEX TO ADVERTISERS

4 Bears Casino & Lodge................................................8

Minnesota Limited..........................................................9

While every effort has been made to ensure the

Bismarck Mandan Chamber EDC............................. 27

MTE Corporation........................................................... 31

the reliability of the source, the publisherin no

Bismarck State College...............................................17

North Dakota Recorders Information Network.....25

and is not responsible for errors, omissions

Northern States Fishing Tools....................................17

and recommendations made by contributors

Blue Cross Blue Shield of North Dakota................ IFC Borsheim Crane Service, Inc........................................3 Fox Thermal......................................................................5 GNDC (Greater North Dakota Chamber)................ 15

President & CEO DAVID LANGSTAFF

Puklich Chevrolet......................................................... 19 Riverbend Oil & Gas, LLC..........................................IBC

Graham Construction...............................................OBC

SandPro, LLC................................................................. 13

J-W Power Company.........................................10 & 11

Spirit Lake Casino & Resort......................................25

Krohne, Inc................................................................6 & 7

Taylor Machine Works................................................23

BAKKEN OIL REPORT – Fall/Winter 2021

accuracy of the information contained in and way guarantees nor warrants the information or statements made by advertisers. Opinions or advertisers are not necessarily those of the publisher, its directors, officersor employees.

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MESSAGE

Message from the editor

SHAYNA WIWIERSKI Well it looks like things are finally looking up in the

Board recently approved Cerilon Inc. to receive $3

oil and gas world.

million in initial development capital to support the

After almost two years in a global pandemic and oil prices taking a nose-dive, this past year saw things taking a positive spin for the oil and gas industry. As we know, the industry is an important way of life for the state of North Dakota, and just like anything, they have also learned to adapt to the way that the world is going. As you’ll read on page 14, North Dakota has embarked on a new path that will promote commercialization of low-emission energy technology. The 2021 Legislature created the Clean Sustainable Energy Authority (CSEA) and it is being funded by clean energy grants and more to support

development of a major GTL complex in Williams County. This facility will support the growth of natural gas production in North Dakota while also assisting in meeting the governor’s challenge to make the state carbon neutral by 2030. Those are just two stories we have in store for you in this issue of the Bakken Oil Report magazine. I hope you enjoy reading the features we have in this edition, and if you want to keep up-to-date between issues on Bakken news and more, make sure you check us out online at bakkenoilreport.com.

commercialization of low-emission projects.

Strike oil!

Of course, the state isn’t leaving behind the

Shayna Wiwierski

resource that helps sustain it. As you’ll read on

shayna@delcommunications.com

page 16, the North Dakota Development Fund

bakkenoilreport.com w

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MESSAGE

Message from North Dakota Senator

JOHN HOEVEN

Pushing back on President Biden’s harmful energy agenda Since January, President Biden has been saying

adversaries – who have less stringent environmental

“no” to America’s energy producers. As a result,

practices – when our domestic energy industry is

Americans are paying more for energy, whether

ready and willing to answer the call to meet our

it be at the gas pump or their monthly utility bills.

country’s growing demand for energy.

The cost of gasoline in North Dakota has increased about 50 percent compared to last year, and due to skyrocketing natural gas prices, home heating costs are expected to be up 30 percent this winter. Higher energy prices drive up the costs of everything we consume – meaning inflation will continue to rise, undermining the wage gains we’ve made in recent years and hurting lower income households the most. For an energy-rich nation such as ours, this

administration’s anti-energy policies, while also working to empower our American energy workers to develop our abundant energy reserves at home, using the latest and greatest technology to do it with the very best environmental stewardship. To this end, we are: •P ressing the administration to end the oil and

situation is unnecessary and completely avoidable.

gas moratorium on federal lands and to move

Just a decade ago, North Dakotans helped crack

forward with all postponed and future lease sales,

the code on hydraulic fracturing, which unlocked the potential of our nation’s vast energy reserves. This helped the United States become the world’s

consistent with a federal court decision from earlier this year. • Working to stop the Democrats’ reckless tax-

largest oil and gas producer, as well as a net exporter

and-spend legislation, which would impose

of energy in 2019. Americans benefited from our

burdensome taxes and unworkable mandates on

energy independence through record-low energy

domestic energy producers and harm consumers.

prices, good-paying jobs, and greater economic and national security. Rather than build upon this success, President Biden has hit the brakes on domestic energy production. His administration is blocking new energy leases on federal lands, stifling the opportunity to harness our abundant taxpayer-owned energy resources. Further, President Biden killed the Keystone XL

•A dvancing efforts to crack the code on carbon capture, utilization and storage (CCUS) technologies, including for Enhanced Oil Recovery (EOR), which will enable the U.S. to continue utilizing all of its abundant energy resources while reducing emissions. • S upporting the advancement of key energy

pipeline and is actively discouraging needed

projects, like the North Bakken Expansion Pipeline,

private sector investment in new oil, gas and coal

and streamlining the approval process for pipelines,

production.

transmission lines and other facilities needed to get

At the same time that his administration is pursuing

That’s why we continue to push back on the Biden’s

energy to market.

their Green New Deal agenda here at home,

Through these efforts, we are supporting the good

President Biden is pleading with Russia, Saudi

work of our country’s energy producers and helping

Arabia, and other OPEC nations to pump more oil.

ensure more affordable energy for Americans, and

The administration also allowed the completion of

President Biden should do the same. Increasing

Russia’s Nord Stream 2 Pipeline, which will bring

America’s domestic supply of energy means lower

Russian-produced natural gas into Europe. It makes

costs for consumers, a stronger economy and a more

no sense to increase our dependence on our

secure nation. It’s as simple as that. w

BAKKEN OIL REPORT – Fall/Winter 2021

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North Dakota making a push for clean energy It seems counter-intuitive, but a state best known for its fossil

some things that we can do maybe that other states can’t do,”

fuel production is embarking on a path that could make it the

Bosch said. “So, the impetus behind the bill was to put some

first carbon-neutral state in the country.

policy in place that makes us the nation, and perhaps even the

North Dakota, among the nation’s top producers of coal, oil and natural gas, has embarked on a new path that will promote commercialization of low-emission energy technology. The 2021 Legislature created the Clean Sustainable Energy Authority (CSEA) and initially funded it with $25 million for clean energy grants, and $250 in borrowing authority from the Bank of North Dakota for loans to support commercialization of low-emission projects. CSEA members, which represent various sectors of the energy industry, are now reviewing the first

world leader in the development and the commercialization of low-emission technology.” Governor Doug Burgum often refers to North Dakota as hitting the “geological jackpot,” a reference to the fact that the state not only has huge fossil fuel reserves, but its geology also has the capacity to store massive amounts of gas or liquids in underground formations. Geologists have estimated the state has the ability to store 252 billion tons of carbon dioxide in underground formations.

round of grant and loan applications. The group will make its

Burgum admits state officials have been surprised by the

recommendations to the ND Industrial Commission, which acted

private sector response to the opportunity for clean energy

on them at a meeting on December 20.

development in North Dakota.

Lt. Governor Brent Sanford said grant applications totaled

"I have to say this even exceeded our estimates and

$62 million, far exceeding the money available. Sanford said

expectations because now we have a list of over $25 billion

loan requests total about $175 million, which reflects what he

genuinely-interested, legitimate companies that want to invest

described as “almost a rabid amount of investment coming our

in value-added energy in North Dakota, and their interest is here

way.”

because of the fact that we have the geologic capability to do

The impetus for the clean energy push began about 18 months

the CO2 storage," Burgum said.

ago, according to Rep. Glenn Bosch, R-Bismarck, the prime

The CSEA is backed by a non-voting technical committee, which

sponsor of the legislation that established the authority. He

includes representatives of the Departments of Commerce,

describes how he and several other legislators met with industry

Environmental Quality, Mineral Resources, the Pipeline Authority,

and energy experts who told them about the opportunity for

the Transmission Authority, Energy and Environmental Research

someone to take the lead on the commercialization of low-

Center, the Bank of ND and the Outdoor Heritage Fund advisory

emission technology.

board.

“We listened and we thought, you know, hey there's something

More information about the CSEA can be found at

here, we have a uniqueness about our state that makes us have

www.nd.gov/ndic/csea-infopage.htm. w

BAKKEN OIL REPORT – Fall/Winter 2021

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Burgum, Commerce announce ND Development Fund support for Cerilon to build $2.8B gas-to-liquids plant

The gas-to-liquids (GTL) complex will support the growth of natural gas production in North Dakota while also assisting in meeting the governor’s challenge to make North Dakota carbon neutral by 2030 through innovation over regulation. Gov. Doug Burgum and the North Dakota Department of

challenge to make North Dakota carbon neutral by 2030 through

Commerce announced on October 14, 2021 that the North

innovation over regulation.

Dakota Development Fund has approved initial support for Cerilon Inc. to develop a major gas-to-liquids (GTL) complex in North Dakota, with the initial phase estimated at $2.8 billion.

“Our paramount goal is to deliver sustainable, long-term value to our stakeholders, community, and the environment. The state-ofthe-art GTL facility will be the lowest carbon footprint facility of

The Development Fund Board approved $3 million in initial

its kind in the world,” said Nico Duursema, Cerilon Inc. chairman.

developmental capital to Cerilon GTL Inc., a subsidiary of Calgary,

The plant will be based in Trenton, North Dakota, and following

Alberta-based Cerilon Inc., for the GTL complex, with further financial support anticipated.

the necessary development work, construction will commence in early 2023. The location will allow rail and pipeline access

With this support, Cerilon GTL will proceed with the remaining

and offers carbon sequestration opportunities. Cerilon GTL

development in anticipation of construction of the $2.8 billion

anticipates the establishment of additional phases and other

Phase 1 GTL facility in Williams County. The GTL project supports

facilities as part of its vision for the complex.

state leadership’s strategy to diversify the energy industry and

“The Cerilon GTL complex has the potential to be one of the

support clean, environmentally responsible energy development.

largest economic expansion projects in the history of North

“The global investment community and markets are demanding

Dakota,” said James Leiman, commerce commissioner. “GTL

low carbon energy,” Burgum said. “North Dakota is wellpositioned to be a global leader and coveted location for

facilities support the oil industry while reducing environmental impacts. The Williams County facility will be one of many

businesses who are looking to expand and respond to the many

expansions that make North Dakota a leader in carbon neutrality.”

factors that are currently shaping the future of energy.”

The North Dakota Development Fund was created in 1991 as an

The primary outputs of the Phase 1 GTL facility will consist

economic development tool. It provides flexible funding through

of 24,000 barrels per day of ultra-low sulfur diesel and other specialty products. All products are in high demand, and the

debt and equity investments for new or expanding North Dakota primary sector businesses.

operations will support the growth of natural gas production

More information about the NDDF can be found at belegendary.

in North Dakota while also assisting in meeting the governor’s

link/North-Dakota-Development-Fund. w

BAKKEN OIL REPORT – Fall/Winter 2021

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North Dakota Development Fund supports sustainable oil and energy, carbon neutrality North Dakota is currently in the

“North Dakota is becoming a coveted

demand, and the operations will support the

transformation of becoming the state

location for businesses around the world

growth of natural gas production in North

with the highest GDP per capital in the

that are striving to diversify the energy

Dakota while also assisting in meeting the

nation. Many factors are leading to this

industry with clean and environmentally

governor’s challenge to make North Dakota

achievement, with innovation being

responsible energy development,” said

carbon neutral by 2030 through innovation

a primary catalyst for a trajectory of

Josh Teigen, Commerce director of

over regulation.

economic amelioration.

economic development and finance. “As

“Western North Dakota is at the cusp of

To bolster innovation, the North Dakota

this transformation in energy continues

Department of Commerce offers many resources and programs geared at assisting business start-up and expansion

to grow, we want to ensure businesses have the financial resources necessary to not only complement this economic

that will contribute to elevate the state’s

movement, but to also be a leader

economy.

and inspire other businesses to see

The North Dakota Development Fund, administered by Commerce, is an

North Dakota as the prime location for innovation and prosperity.”

economic development tool that provides

Most recently, the board approved

flexible funding through debt and equity

Cerilon Inc. to receive $3 million in initial

investments for new or expanding North

development capital to support the

Dakota primary sector businesses.

development of a major gas-to-liquids

From 2020 to Q3 2021, more than

(GTL) complex in Williams County.

leading the world’s next major gas-toliquids boom providing consumers with less expensive and cleaner energy,” Commerce Commissioner James Leiman said. “The Cerilon project provides the state with the requisite infrastructure to make this happen.” In addition to offering GTL products, the projected facility will allow additional carbon capturing opportunities. “We are in the midst of an evolution within the oil and energy industry,” Leiman said. “Even with the increasing demands for cleaner energy, North Dakota still has

$4.2 million was awarded to new and

The primary outputs of the Phase 1 GTL

the ability to increase production, while

expanding businesses with nearly $1

facility will consist of 24,000 barrels per

simultaneously being a leader in green

million going directly to the oil and energy

day of ultra-low sulfur diesel and other

energy and carbon neutrality. Commerce

industry.

specialty products. All products are in high

continuously seeks innovative avenues to invest in businesses that invest in our state’s economy and communities.” North Dakota is one of the most geographically ideal locations for carbon capturing with multiple formations, several thousand feet below the surface, that will enable carbon storage. With the given geography and a state that supports innovation over regulation, many companies have the opportunity to join North Dakota in leading the next energy boom while also achieving carbon neutrality. More information about the North Dakota Development Fund can be found at belegendary.link/North-DakotaDevelopment-Fund. w

BAKKEN OIL REPORT – Fall/Winter 2021

North Dakota perseveres in powering the world By Ron Ness, President, North Dakota Petroleum Council

The past year saw steady growth in the oil and gas industry

with industry instead of against it. On the state level, industry-

in North Dakota, and high oil prices allowed the industry to

backed regulatory initiatives led to a record 94 percent gas

recover financially from the depths of the COVID-19 economic

capture rate in North Dakota, while simultaneously hitting

crisis. Through the amazing work of our talented workforce,

a record number of 17,041 producing wells in 2021. North

each new Bakken well is becoming more efficient, more

Dakota’s Bakken Restart well-plugging program was initiated

economical, and more productive, all with a decreasing

in May 2020 using CARES Act funds to put oilfield workers back

environmental footprint and fewer emissions. These are focal

to work and plug and reclaim abandoned wells. That program

points for the future. Technology will continue to improve if

became the blueprint for the REGROW Act, which established

the regulatory and political environment allows the industry to

a similar federal program to plug abandoned wells across

focus on solutions instead of fighting costly and burdensome

the country. The North Dakota Bakken is proof that working

regulations and policies.

with industry instead of choking innovation with regulation

In 2021, the North Dakota Petroleum Council (NDPC) worked

produces better results.

diligently to advocate for the oil and gas industry by supporting

As we move into 2022, NDPC and its members are committed

meaningful legislation and discussing the impact of federal

to working hard to move the industry forward. Industry leaders

decisions on the industry with top regulators. During North

in the Bakken will continue to advocate for innovation over

Dakota’s 2021 Regular Legislative Session, NDPC supported

regulation, addressing workforce shortages, and meeting

House Bill 1452, which created the Clean Sustainable Energy

the world’s energy needs. Although the industry faces heavy

Authority. The Authority supports the commercialization of

challenges from the federal level, North Dakota’s oil and gas

21st century technologies that advance low-emission, minimal

industry will continue to persevere in powering the world. I

footprint energy production in North Dakota. Other bills

encourage each of you to engage and support the industry and

supported by the NDPC included the creation of an on-site

your community through participation in industry events and

flare mitigation tax credit, state royalty obligation reform, a

getting involved in local, state, and national political discussions

regulatory framework for underground natural gas injection and

advocating for the future of your industry. w

storage, and a trio of bills for allocating and investing dollars from the state’s Legacy Fund. When North Dakota’s legislature was called back for a Special Session in November, NDPC successfully advocated for one-time funding for a natural gas pipeline to provide Bakken gas to the state’s eastern border. The oil and gas industry plays an important role in shaping North Dakota’s economy and way of life. Meaningful policies, reforms, and programs allow the industry to flourish while innovating and improving production processes. Heavy regulation and government overreach from the federal level stifles this innovation and improvement. Throughout 2021, the North Dakota Petroleum Council met with federal regulators and national leaders to drive home the importance of working

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Amid worker shortage, BSC offers growth for employers, employees variables such as pressure, flow, level, density, temperature, force, vibration and chemical composition. Students in the Petroleum Production Technology program gain a broad background in safe and responsible operations and maintenance of equipment used in the oil extraction and services industry. Graduates are prepared for a high-paying career and plentiful employment opportunities. Many jobs are available for operator, technician BSC has helped employers across the country develop and retain their existing workforce through an array of offerings in the energy field.

and service employees in the petroleum industry, including service sectors in the Bakken and other areas where petroleum is produced.

Like the rest of the country, the Bakken

The Process Technology program

region continues to face a worker

prepares students for employment in

shortage.

operating refineries, ethanol plants,

While employees are scarce, jobs in the oil industry are plentiful. The National Energy Center of Excellence (NECE) at Bismarck State College (BSC), North Dakota’s polytechnic institution, is a source for qualified graduates that employers can quickly tap into. BSC has helped employers across the country develop and retain their existing workforce through an array of offerings

gasification plants, petrochemical plants and natural gas processing plants. Students learn the technical and safety aspects of plant operations, responsibilities of plant operators, and the mechanical and chemical technology needed for working in related industrial operations. A career in Process Technology provides excellent pay and employability.

BSC offers classes in a flexible format that meets the needs of both employees and their employers. Students have the option to attend classes part time or full time, and many programs are offered on campus and online. The experiencedbased approach to curriculum facilitates learning with hands-on labs, both on the job and through apprenticeships or internships. Students can complete their labs on campus, or for online students, with a local employer. With courses that boost practical

in the energy field. BSC offers 14 energy

In the Instrumentation and Control

degrees including Process Technology,

program, students work toward a

Instrumentation and Control, and

career as an instrument technician. The

Petroleum Production, all of which are in

program combines theory and hands-

high demand in the Bakken region. State-

on training with the latest instruments,

of-the-art technology and equipment,

working processes and computerized

For more information about BSC’s

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BAKKEN OIL REPORT – Fall/Winter 2021

knowledge, employees get the opportunity to upskill, while employers benefit from a more abundant and competent workforce.

ENVERUS

Shale 3.0: Fast track economies of scale with digitalization and analytics By Dave Savelle and Akash Sharma It is the goal of every business to

relationships, predict unknown

Of course, use of capital is key.

increase its top-line revenue and its

outcomes and automate decisions.

Understanding the impact of spending

net income. But achieving that growth

(M&A).

DIGITALIZATION OF BACKOFFICE PROCESSES – THE FOUNDATION FOR ECONOMIES OF SCALE

Recent examples include the acquisition

Digitalization of back-office procedures

of Anadarko by Occidental Petroleum,

achieves two goals:

the acquisition of Parsley Energy by

1) It speeds up the workflows between

requires a winning strategy. In the oil & gas industry, one growth strategy involves mergers and acquisitions

is especially important to the teams handling procurement or supply chain operations, finance and auditing. However, it isn’t necessary to undertake an acquisition to tap the power of spending analytics. Even within a single organization, the silos that separate departments can make it seem like

Pioneer Natural Resources, Pioneer’s

teams within a company. That means

members of internal teams are speaking

acquisition of DoublePoint Energy and

higher operating efficiency. Examples

different languages. But these differences

most recently, ConocoPhillips’ move to

are faster invoice cycles and reduced

are equally important for maximum

solidify its position as a leading Permian

manual touchpoints due to automatic

business efficiency.

producer by acquiring Shell’s position in

invoice approvals.

the Delaware Basin. The deals were driven by the potential to create economies of scale. The new management teams must aim to identify best practices and policies, then employ them through the newly configured corporation. How are these best practices and policies identified? The answer is found in digitalization and analytics.

2) It captures valuable spend data. The

This is why a unified platform is critical. It breaks down these silos, allowing faster

improvement enables the combined

collaboration on workflows between

companies to perform spend analysis

stakeholders and providing a single

across the new organization.

source of accurate data to those inside

CHOOSE THE RIGHT SOLUTION TO DIGITALIZE THE RIGHT WAY In an M&A scenario, management begins with two previously unrelated teams that have overlapping responsibilities. But the teams are likely to go about their

Digitalization is improving processes

business in different ways. Differences

by using digital technologies and data.

will likely be found in workflows,

Analytics are using data and math to

operating processes and capital

answer business questions, discover

allocation.

and outside the organization. Thus, procurement is improved through greater visibility into supplier pricing, through a better understanding of vendor quality and workflow modeling. Efficiency in finance/AP, operations and supply chain management improves. Those gains identify opportunities for pay discounts that also add to cash flow for operators. Historically, due to the differences in the way companies report transactions,

How are these best practices and policies identified? The answer is found in digitalization and analytics.

apples-to-apples price analysis between companies has been impossible because they report the same types of transactions in different ways. BAKKEN OIL REPORT – Fall/Winter 2021

ENVERUS

Recognizing this serious impairment

VENDOR DISBURSEMENT FOR COMPANY A AND B

to effective business communications, Enverus created OpenInsights. The solution provides analytics-grade spend data at the category and attribute level for granular analysis.

CATEGORIZED AND ATTRIBUTED DATA • Categories -- Using machine learning and algorithmic approaches working with a team of about 150 analysts across our organization, the Enverus system divides goods and services into “buckets”. For example, proppant, pipes, valves and fittings, and Oil Country Tubular Goods (OCTG). • Attributes –There are several types of different characteristics between products within a category. Enverus identified 40 million unique attributes across all categories. This provides results that are much more usable and reliable. Below is an example of categorized, attributed pipe data.

integrated. After bringing Companies A

Taxonomies — a combination of

and B together, it is evident this is still a

attributes — offer a powerful look

relatively consolidated market.

at price differences. Comparing and

USE CASE 2: PREPARING FOR AN INTEGRATED RFQ

understanding price differentials relative to increasing volumes can lead to significant cost savings. Below

Vendor consolidation isn’t just about

is a concentration of price points for

choosing the lowest cost provider. It's

intermediate casing transactions across

important to understand the price you're

the same four suppliers using three

When two companies merge, the vendor

paying a vendor for a product or service

variables. This allows for the “apple-to-

network grows. Companies can use

is a combination of the quality of the

apples” comparison.

price analysis between suppliers to

product and the services provided.

Note that supplier A and D are selling

This example using taxonomies, shows

casings at three price points, supplier

the price distribution across four

C is selling casings at two price points,

suppliers for intermediate casings.

while supplier B is the most consistent on

USE CASE 1: VENDOR CONSOLIDATION

define preferred vendors. In the example above, the left chart shows Company A with a somewhat integrated supply chain. On the right, Company B is more

pricing for intermediate casing.

USE CASE 3: DETERMINE PRICING PRACTICES USING A REGIONAL PRICE INDEX To accelerate and improve decisionmaking with respect to pricing, Enverus offers regional market price indices for every category—chemicals, proppant

BAKKEN OIL REPORT – Fall/Winter 2021

ENVERUS

types, mesh sizes or OCTG. Comparing

Thus, comprehensive digitalization of

answers to questions that arise due to

individual pricing by category to a

processes across the spend team is the

M&A. It takes the right analysis to identify

market index reveals key areas of

key to gathering the data and finding the

the best practices.

concern and allows for rapid application of money-saving steps. In a merger, it’s possible to use market indexes to

To help companies identify cost savings, Enverus has recorded a free webinar at www.

gain an understanding of how the two

enverus.com/wr/cost-savings-in-ma-digitalization-and-analytics-for-an-evolving-

companies have performed in different

industry-enverus-webinar-replay/

categories relative to the market,

Dave Savelle is the general manager for field ticket operations at Enverus. Akash Sharma is

then identify specific areas in need of

director of strategic advisory services & market insights at Enverus. w

improvement. In the example above, the market price is consistent for Category A (left). The grey zone, which is the variability zone, is shrinking for this particular product. But while Company A's (red line) and Company B’s (yellow line) start low, Company A’s starts to steadily increase. It might be assumed Company B has better pricing practices, leading to the adoption of its strategy across the board. But when the same analysis was applied to Category B, it was found that Company A was more consistent. Thus, the analysis showed there's opportunities for both companies to save money. With respect to market conditions, it’s likely the industry will reorient itself and consolidate through M&A. Therefore, identifying and realizing economies of scale is more critical than ever. BAKKEN OIL REPORT – Fall/Winter 2021

AMERICAN ENERGY ALLIANCE

By Dan Kish, Senior Vice President of Policy, American Energy Alliance America is blessed with enormous

President Biden reverses “America First” energy policies and resorts to begging OPEC and Russia added enormous quantities of oil,

plummeted historically as people stayed

despite well over a century of drilling

home, industries idled and airplanes

wells.

were parked on runways.

Pennsylvania, Ohio and West Virginia

When lockdowns were lifted, demand

contributed oil and gas from the

came roaring back, and with it, higher

Marcellus and other formations. The

prices for energy. Americans are now

United States regained its status as

paying more for gasoline than they

the premier oil and gas producing

have since 2014. Meanwhile, the

country in the world. And in 2019, for

Energy Information Administration

the first time in over 60 years, the U.S.

(EIA) is warning that price increases

From 2010 through 2019, the United

became a net energy exporter…we

for energy this winter will skyrocket,

States provided 81 percent of the

finally achieved long-sought energy

placing additional burdens on families

total increase in global oil production.

independence. Americans were winners

and businesses just recovering from

While world production increased 12.1

and their reward was good jobs,

COVID-19.

million barrels over that time, the U.S.

lower energy prices and the national

energy wealth and the most capable energy workforce in the world. If the government gets out of their way, American workers will explore, find, develop and produce energy and transport and refine it more efficiently and more environmentally safely than anyone else. We know this is true because we did it.

provided 9.77 million of those barrels. North Dakota and the people of the

security benefits of less dependence on foreign nations for the lifeblood of our

Bakken were a major part of this energy

economy.

revolution, attracting investment and

When the COVID-19 virus locked down

good jobs. Texas, with its Permian Basin,

the world economy, demand for energy

President Biden, however, seems to have turned his back on America’s energy industry. From his very first day in office, he has been waging war against our energy industries, leading with revoking the permit for the Keystone XL pipeline, which would have moved Canadian and Bakken oil to our refineries in the Gulf Coast efficiently and environmentally. He is also moving to revoke legally issued leases in ANWR in Alaska, which would feed the TransAlaska Pipeline. He suspended all federal leasing on 2.46 billion acres of on- and offshore federal mineral estate, until a federal judge compelled him to follow the law and hold leases. The results have been predictable. In May, Russia became the number-two supplier of oil to the United States (after

BAKKEN OIL REPORT – Fall/Winter 2021

AMERICAN ENERGY ALLIANCE

It is time to begin unleashing America’s unparalleled energy resources and our best-in-theworld workforce to get back to making America number one, before more damage is done. Canada). By July of this year, Russia was

President Biden begs OPEC and Russia

House and Senate, including six years as

exporting 761,000 barrels of oil per day

for more oil.

chief of staff for the Republicans on the

It is time to begin unleashing America’s

House Resources Committee and four

unparalleled energy resources and our

years on the Senate Energy & Natural

best-in-the-world workforce to get back

Resources Committee staff. His primary

to the U.S. while Alaska’s production was half of that at 380,000 barrels per day. Russia is now supplying more of our oil than Alaska.

to making America number one, before

Meanwhile, investors are spooked by the Biden Administration’s war on energy into not investing here at home, for fear that their investments will be turned sour by further government actions.

more damage is done. Dan Kish is a senior vice president for policy at the American Energy Alliance (AEA). Kish has more than 30 years of experience on congressional committees

focus has been access to resources on government lands and in the waters of the Outer Continental Shelf, and specifically, upon the enormous conventional and unconventional energy there that waits

focused principally upon natural resource

to be allowed to add value to our nation’s

Energy production in the U.S. is still

and energy policies. His service includes

well-being. Kish is a graduate of Wabash

much lower than it was in 2019, even as

the principal resource committees in the

College in Crawfordsville, Indiana. w

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BAKKEN OIL REPORT – Fall/Winter 2021

SRC

Zeroing in on energy in oil and gas By Brook Thalgott, Saskatchewan Research Council The incorporation of renewables, energy storage, management in a smart microgrid can provide substantial gains on the pathway towards net zero operation.

As industries examine how they can reduce emissions and their

Whether you declare first or examine first, a thorough look at

carbon footprint, the idea of net zero energy is gaining traction.

operations is required to get a current state on energy usage,

The oil and gas industry is part of the great energy transition,

emissions and more.

but has some hurdles to cross. Some oil and gas sites are remote, and in some jurisdictions, lack connection to the traditional energy grid. However, there are ways to make the march to net zero. Ryan Jansen, Saskatchewan Research Council (SRC) senior

“An assessment of an oil and gas company’s whole operation can set the baseline. Net zero means more than just energy consumption at an oil and gas site. It also includes miles driven,

research engineer in process development, is an industry expert

waste streams and more. It’s the whole energy picture.”

and has much to say on the subject.

Once that data is compiled and assessed, then a company can

GETTING STARTED “Some companies, whether driven by policy, stakeholders, or strategy, will declare their intention to become net zero and then begin analyzing options to get there,” says Jansen. “Other companies, especially ones with a long operational history, will examine pathways to net zero and develop a plan prior to declaring plans to meet net zero energy operation.” Either option

start making decisions on where to make changes to reduce energy consumption, use energy more efficiently and shift energy sources where possible.

CHANGE FOR THE BETTER “Once you have determined your baseline and can see where work is needed, it’s time to go after the quick wins,” says Jansen.

can work for companies. It is a matter of deciding which works

Reducing usage or using energy more efficiently is often where

for your organization.

changes can be made first to have the most cost-effective impact

BAKKEN OIL REPORT – Fall/Winter 2021

SRC

on the goal of net zero. It’s here where processes can be altered

asset in the near future as well. Renewable-based micro and

or eliminated to reduce consumption, or technology can be

smart grids also offer options for net zero energy goals. The

integrated that is more efficient.

incorporation of renewables, energy storage, conventional generation and load management in a smart microgrid can

THE BIG STUFF

provide substantial gains on the pathway towards net zero

After the energy load reductions and efficiencies are addressed, attention should turn to energy sources and generation. This is the most complex hurdle on the road to net zero with many

operation.

LET’S DO THIS

established and innovative technologies offering the oil and gas

“There is no straight line to net zero energy,” says Jansen. “Pre-

industry opportunities for change.

assessment, a deep understanding of your operation, assessing

“Reliability is the core matter in this space,” says Jansen. “Oil and gas operations need a reliable energy source all the time.

costs and benefits, and setting goals are vital for success. Just the process of getting started will raise more questions.”

While renewable energy sources can help reduce emissions and

Baseline assessment is the start and SRC’s energy experts can

carbon footprint, additional technologies and controls should be

help your company determine what steps you need to take

considered to ensure both reliability and resiliency.”

to achieve net zero. Net zero energy in oil and gas is possible

Solar and wind energy are well-established technologies, but storage may be required to ensure that energy is available

with the right mix of data analysis, decisions, technology and expertise to guide the way. SRC offers net zero energy services for the oil and gas industry.

Nuclear energy through small modular reactors may be a great

Learn more at www.src.sk.ca. w

www.delcommunications.com

constantly—or an alternative backup system may be needed.

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BAKKEN OIL REPORT – Fall/Winter 2021

PTRC

Williston Basin Petroleum Conference 2022 has renewed focus on all energy from the Earth

strongly focused on oil and gas, considering their importance in the Basin as a whole. Erik Nickel, director of operations at the PTRC notes that the oil and gas industry “must also be aware of the rising importance of environmental, The electrical presentations at the WBPC will cover all areas of geology and engineering innovations.

social and governance issues.” Those issues are becoming of increasing focus

Regina last hosted the Williston Basin

May 17-18, 2022 will see the Canadian

for members of the public and many

Petroleum Conference (WBPC) in 2019.

event shift focus to all the sources of

energy companies are examining ESG in

Normally, Saskatchewan and North

energy in the earth – from the potential

their regular operations. “We want the

Dakota alternated hosting the event,

for geothermal from reservoirs in Canada

WBPC to help address those.”

with odd-numbered years happening in

and the U.S., to the burgeoning lithium

Regina and even-numbered years hosted

extraction industry in Saskatchewan, to

south of the border in Bismarck by the

CO2 storage to help mitigate emissions in

North Dakota Petroleum Council (NDPC).

oil and gas, and, finally to identifying and

That routine was disrupted when North Dakota faced hosting the 2020

exploiting other subsurface commodities like helium and hydrogen.

The tradeshow component of the 2022 Saskatchewan version of the conference is looking for companies with innovative technologies in a wide array of areas. Oilfield emissions improvements like methane reductions, CO2 capture and

WBPC just as the pandemic began.

“In the past, the Williston Basin

storage technologies, and commodity

Through discussions with the PTRC and

Conference has had some papers and

extraction technologies all will be of

the Government of Saskatchewan –

technical presentations looking at these

interest to attendees. This year’s event

organizers of the conference in Canada

other commodities,” noted Melinda

will be hosted at the Delta Hotel and

Yurkowski, assistant chief geologist at

Saskatchewan Conference Centre in

the Saskatchewan Geological Survey.

downtown Regina.

– it was decided Bismarck would forgo the conference in 2020, with Canada agreeing to move their next hosting to 2022 and Bismarck having their day in the sun in 2021. Even-numbered years are now when Saskatchewan hosts, with odd numbered moving to North Dakota. 28

BAKKEN OIL REPORT – Fall/Winter 2021

“But this upcoming event will have complete sessions dedicated to many of these subsurface sources of energy and materials.” WBPC 2022 will, of course, remain

A call for papers is coming in December 2021 (deadline will be likely late January 2022) and registration at the WBPC website should also begin in December. Please visit wbpc.ca for more details. w

FRASER INSTITUTE

North Dakota was ranked fourth in the Fraser Institute's most attractive jurisdictions for oil and gas investment.

Canadian provinces shut out of top 10 most attractive jurisdictions in North America for oil and gas investment Texas and Oklahoma are once again at the top of the rankings for

the cost of regulatory compliance as major areas of concern in

the most attractive jurisdictions in North America for oil and gas

Canadian jurisdictions compared to U.S. states.

investment, while no Canadian province is even in the top 10, according to this year’s survey of petroleum-sector executives released on November 25, 2021 by the Fraser Institute, an independent, non-partisan, Canadian public policy think-tank. “The message from investors is clear—Canada’s onerous and uncertain regulatory environment continues to hurt the investment attractiveness of the country’s oil and gas industry,” said Elmira Aliakbari, director of the Fraser Institute’s Centre

Critically, only 13 and 20 percent of respondents, respectively, indicated that environmental regulatory uncertainty in Oklahoma and Texas was a deterrent to investment. For Alberta, that number was 65 percent—more than three times that of both states. Likewise, 56 percent of respondents identified the cost of regulatory compliance as a deterrent to investment in Alberta

for Natural Resource Studies and co-author of the Canada-US

compared to just nine percent for first-place Texas.

Energy Sector Competitiveness Survey 2021.

Rounding out the top five most attractive jurisdictions for oil and

The survey, conducted between May and August of 2021, ranks

gas investment were Oklahoma (second), Wyoming (third), North

22 North American jurisdictions (17 states and five provinces and

Dakota (fourth) and Kansas (fifth).

territories) based on policies affecting oil and gas investment.

Newfoundland and Labrador ranked 16th, British Columbia

This year, out of the 22 jurisdictions, Texas ranked first, while

ranked 18th, and the Northwest Territories ranked 20th out of 22.

Alberta ranked 12th. Saskatchewan was Canada’s top-ranked

“Policies matter, and when investors are clearly indicating they

jurisdiction at 11th.

would rather invest in American states instead of Canadian

Investors pointed to the uncertainty concerning environmental

jurisdictions, policymakers should take note,” said Jairo Yunis, a

regulations, regulatory duplication and inconsistencies, and

policy analyst at the Fraser Institute. w BAKKEN OIL REPORT – Fall/Winter 2021

MTE CORP.

Protecting profits in the new oil economy MTE’s power quality products are engineered to withstand the rigors of upstream production and keep operations running smoothly By Ahsan Javed, MTE Corporation The past 24 months have been a roller-

production comes an increased risk of

interference, and reduced efficiency,

coaster for the oil and gas market. From

unplanned downtime due to inclement

resulting in a much higher electrical bill.

the unprecedented negative oil prices in

weather, lightning storms, or dubious

In egregious instances, electrical utilities

the first half of 2020 to the near-record

electrical reliability. Stoppages in

can send the “dreaded letter” effectively

levels of domestic production in Q4 2021,

production due to tripping, utility

shutting down a rig if the harmonics are

the market is recovering from significant

compliance issues, and motor damage

causing deleterious effects to business

whiplash. The changing dynamics of

can lead to irrecoverable profit loss for

of communities on the same part of the

the market have put additional focus

many operators.

grid. On the motor side of the system,

on smaller, onshore producers who can greatly benefit from addressing electrical power quality issues before they become an impediment to the uptime, safety and

THE HIDDEN DANGERS (AND COSTS) OF ELECTRICAL “POLLUTION”

harmonics can cause nuisance tripping, failed relays, and motor failure. Stopping an artificial lift operation to replace a motor results in expensive downtime and

profitability of a rig. First, let’s explore

The growing use of variable frequency

maintenance, all of which can increase

how we got here and then address how

drives (VFD) in artificial lift operations,

dramatically if the correct spare parts are

MTE can help.

such as Electrical Submersible Pumps

not readily available.

THRIVING IN AN EVOLVING MARKETPLACE

(ESPs), is accompanied by increasing,

The calculus for large oil producers has

(PWM) to control electrical motors, a

POWER QUALITY INNOVATION FOCUSED ON THE OIL AND GAS MARKET

changed dramatically over the past

method that creates many impulses or

MTE has the most robust portfolio of

few years. Activist investors focused on forward-looking environmental investments and strict cost discipline have made large firms exit many domestic oil operations. This has opened the door for the smaller operators to prosper in a booming

unwanted harmonics within the electrical system. VFDs use Pulse Width Modulation

edges, resulting in harmful harmonics on the power and control cables. These harmonics cause “pollution” of the electrical signals, commonly manifested as stray voltages and currents, technically known as common-mode or differential mode noise.

reactors, harmonic filters, and motor protection solutions on the market. Our newest development is EnduraCaps™, the toughest capacitors in the market. Through close collaboration with our customers, we have developed a capacitor solution that features a

market that regained steam during the

Even minor stray voltages and currents

ruggedized design that ensures longevity

post-pandemic recovery. As OPEC kept

can eventually lead to major issues for

in the harshest environment. MTE’s

production low, oil prices spiked and

an oil and gas operation. On the utility

proprietary design and processes enable

domestic production reached near all-

side of the system, unwanted harmonics

EnduraCaps™ to withstand hundreds of

time highs. However, with increased

can cause brown-outs, electrical

additional transients versus competitive

BAKKEN OIL REPORT – Fall/Winter 2021

Sinewave Nexus®, the most advanced motor protection solution on the market with the industry’s only five-year motor bearing protection guarantee.

THE RIGHT PRODUCTS WHEN YOU NEED THEM

INVEST IN POWER QUALITY NOW The oil market is dynamic and full of opportunity. Ensure you are capitalizing on that opportunity by addressing your power quality concerns before they impact your operations. Maintaining power quality and implementing

The post-pandemic recovery has

preventative measures extends

brought with it unprecedented supply

equipment run times, maximizes uptime,

chain challenges which have stretched

and makes your business more money. w

manufacturing operations and extended products. These breakthroughs result in a 30 percent improvement in breakdown voltage in the same convenient package as before. All this means even more hardened power quality solutions that ensure operations stay up and running.

lead times. As mentioned above, long lead times can erode profits and productivity for a rig. MTE recognized the looming challenges early and developed a market-leading stocking initiative called Power Quality Express. This initiative offers the shortest lead times in the

EnduraCaps™ join our array of new

industry, with over 100 products in stock

products focused on the oil and gas

and over 600 products available within

market, including our popular High

10 days. This investment ensures that our

Frequency Sinewave Guardian® filters,

most important customers expeditiously

perfect for permanent magnet motor

get the products they need to get their

(PMM) applications, and our flagship

operation back on track.

BAKKEN OIL REPORT – Fall/Winter 2021

ENBRIDGE

Enbridge responds to Canada Energy Regulator decision to deny Mainline contracting On November 28, 2021, Enbridge Inc. (TSX: ENB) (NYSE: ENB)

CER also found that elements of the application provided strong

responded to the Canada Energy Regulator's (CER) November 26,

justification for some proportion of firm service on the Canadian

2021 decision to deny the implementation of contracting for firm

Mainline. However, the CER denied the application on the basis

service on the Enbridge Canadian Mainline system.

that, among other things, contracting as proposed would result in a

Enbridge has completed its review of the decision and identified next steps that include re-engaging all stakeholders, including shippers and non-shippers on the Mainline system. The Enbridge Mainline is a critical conduit connecting western Canadian crude oil and product supply with Canadian and U.S. Midwest markets, and ultimately the U.S. Gulf Coast. For decades, the system has provided its customers with unparalleled market access, crude oil quality management, system reliability and long-term expansion potential at the most competitive toll. Since inception of the Enbridge system in 1950, the commercial underpinning of

significant change to access the Canadian Mainline and potentially inequitable outcomes to some shippers and non-shippers without a compelling justification. The CER confirmed Enbridge's existing process for downstream verification and that interim tolls would stay in effect. Based on its review of the CER decision, Enbridge will initiate, in consultation with its stakeholders, a process to negotiate toward a go-forward Mainline commercial framework. Elements of the process will include: • E nbridge will re-engage with stakeholders, to receive input on key

the Mainline has evolved, from a contested cost-of-service (COS)

objectives and variables that are important in considering the future

framework to incentive rate making. Enbridge pioneered the first

commercial framework, the current industry outlook and desire for

incentive tolling agreement with our customers in 1995, which

future expansion of the Mainline; and

aligned industry and Enbridge interests, and supported significant investment and expansion of the Mainline.

• E nbridge will explore, with stakeholders, alternatives that may include: a modified and extended CTS agreement, a new incentive

The most recent incentive agreement, called the Competitive Tolling

rate-making agreement, or a COS rate-making structure. Any

Settlement (CTS Agreement), expired in June 2021; therefore, the

negotiated settlement would require CER approval before

Mainline is currently under interim tolls (subject to refund) and which

implementation.

will stay in effect until new tolls are approved by the CER. In 2018, in preparation for the upcoming expiry of the CTS Agreement, Enbridge initiated consultations with industry participants to determine their goals for the next Mainline tolling arrangement. Among other feedback, the company heard significant concerns from industry over continuing Mainline apportionment, due to growing western

In parallel with negotiations of a potential negotiated settlement, Enbridge will prepare a COS application for the Canadian Mainline, which will be filed with the CER if Enbridge, after consultation with stakeholders, concludes that an agreement to continue with incentive rate making is not achievable.

Canadian production and lack of sufficient egress. A large portion of

Enbridge expects the preceding steps to begin in December 2021,

existing shippers expressed desire for continued toll certainty, and to

although the negotiating process may take through 2022. We expect

contract for firm service to ensure access to the system.

the subsequent CER review and decision process to conclude in 2023.

However, it was also evident from extensive industry input that there

From a financial perspective, Mainline throughput is expected to

was no consensus on what a new commercial structure should look

be strong over the next several years and the company's outlook is

like – some favored contracting, while others opposed it altogether,

positive. Based on our review of the CER decision and other factors,

preferring to maintain the status-quo, a monthly nominations

the company anticipates that the range of financial outcomes

process and a fixed toll. After significant negotiation with industry

associated with an alternative commercial model will be manageable

on a comprehensive set of terms, Enbridge applied to the CER to

and is not expected to materially impact Enbridge's financial results.

contract the Canadian Mainline.

Enbridge provided its 2022 guidance, longer term outlook and

In reaching its decision, the CER determined that providing firm

strategic priorities at Enbridge Day on December 7th, 2021, in

service on the Canadian Mainline is not contrary to the CER Act. The

Toronto. w

BAKKEN OIL REPORT – Fall/Winter 2021

NODAK OILFIELD SERVICES

Nodak Oilfield Services expands into flare mitigation technologies with EcoVapor

EcoVapor and Nodak Oilfield Services

to state tax incentives to encourage

have joined forces to roll out EcoVapor’s

gas capture and reduced emissions, the

solutions into the Bakken shale play of

federal government is also expected to

North Dakota and Montana, an area

renew methane emissions regulations.

striving to reduce flaring and emissions

These pressures, combined with ESG

from oil and gas development.

mandates, are increasing demand

Nodak Oilfield Services is one of the most highly-trained and experienced oilfield services companies in the Bakken with

for economically viable solutions for improving environmental performance and sustainability.

a foundation in safe-work practices and

EcoVapor’s ZerO2™ and Sulfur Sentinel™

delivering quality. EcoVapor’s life-of-well

solutions offer oil and gas operators a

solutions help operators eliminate venting

way to improve both environmental and

and flaring while boosting economic

economic performance. E&P companies

returns from their recovered gas streams.

using EcoVapor technology can

EcoVapor, the leader in solutions for reducing routine flaring and emissions, announced in September of 2021 that it

simultaneously achieve the sometimesconflicting expectations of investors, regulators and key stakeholders.

has teamed up with Williston-based Nodak

“We are thrilled to be working with

Oilfield Services to launch the company’s

Nodak, who is the right partner to help

expansion into the Bakken shale play. The

us serve operators in the Bakken shale

partnership leverages the strengths of

with our proven life-of-well solutions for

each organization to provide compelling

eliminating routine flaring and venting

value to oil and gas producers in the

emissions,” said Jason Roe, EcoVapor

Bakken market seeking economically

CEO. “EcoVapor is already working in

viable solutions for eliminating routine

most major oil and gas basins, and

flaring and venting emissions.

joining forces with Nodak accelerates our

Oil and gas producers in the Bakken shale play are being increasingly tasked with reducing flaring and meeting

expansion into this major oil-producing region with a reputable partner that can help us better serve the local operators.”

Dakota’s unique oil and gas operating environment. This combination provides oil and gas producers in the Bakken with proven solutions for improving their gas capture rates, supported by a reliable and professional local team. “We are excited about partnering with EcoVapor and to take a progressive approach to the industry by offering their innovative environmental performance solutions to the Bakken,” said Clint Hacker, CEO of Nodak. “Operators are looking for new approaches that not only reduce flaring and emissions, but also generate more oil and gas revenue – the timing of this initiative couldn’t be better. We plan an aggressive rollout of

higher natural gas capture rates. In

EcoVapor brings its solutions and technical

the ZerO2 solution as a turnkey service

addition to the local state government

expertise to the partnership, while Nodak

to our existing customers and anticipate

goals of eliminating flaring in the next

brings a local connection with its boots-

EcoVapor technologies will be a key factor

decade and the current commitment

on-the-ground knowledge of North

in attracting new business.” w BAKKEN OIL REPORT – Fall/Winter 2021

STEFFES GROUP

Oil and used equipment Prices do not go hand in hand

In May of 2021, Steffes Group sold a 2008 Caterpillar D8T dozer with 10,349 hours for $256,000 in Keene, ND.

In June of 2021, Steffes Group sold a 2019 Kenworth W900 with 169,741 miles for $148,000 in Watford City, ND.

In September of 2021, Steffes Group sold a 2015 John Deere 844K-II wheel loader with 15.4 hours for $380,000 in Watford City, ND.

It’s no secret that industry activity has

oil patches. There is always a secondary

heavy equipment have become major

slowed down in the areas of the Bakken

market for used equipment, and when

consumers of these products.

oil patch covering Western North Dakota

you add the supply chain shortages to

and Eastern Montana. When the drilling of

this, the demand multiplies. We did find

new wells came to a halt, the region saw

it surprising to see the range the demand

a considerable downturn in activity. This

is coming from. In a recent timed online

industry change has caused many big and

auction with assets located in western

small organizations to liquidate assets and

North Dakota, we saw website visitors

sell off much of the equipment that will

from 49 states and 13 different countries,

not be used in the short term.

including several in South America, Egypt,

The biggest and most welcome surprise is

Ireland, Sweden and Canada participating.

that the used equipment being liquidated

Another primary market for much of this

is generally bringing very strong prices.

equipment comes from the farm and

Since Steffes Group is a significant player

ranch segment. With the average size

in the asset liquidation taking place with over $30 million of equipment transacted in Western North Dakota in 2021, we thought we would share some of the information about where the equipment is going and what kind of prices the used assets of the oil field are bringing. First and foremost, let’s discuss the market. Where is the demand coming

of the farms and ranches growing, they have increasing needs for more trucks,

While the slowdown in the Bakken oil patch has caused some things to drop in price, the market for used equipment is not following suit. We anticipate it to be a sellers’ market for the foreseeable future, and if the supply chain issues continue, the market will maintain or increase. As the auction world continues to be a sellers’ market, we continue to see premium prices on used equipment. In May of 2021, Steffes Group sold a 2008 Caterpillar D8T dozer with 10,349 hours for $256,000 in Keene, ND. In June of 2021,

payloaders, forklifts, backhoes and more.

Steffes Group sold a 2019 Kenworth W900

Even things like water tanks for drought

with 169,741 miles for $148,000 in Watford

conditions and large power units are

City, ND. In September of 2021, Steffes

being consumed for these businesses.

Group sold a 2015 John Deere 844K-II

We continue to see other organizations participate outside the robust

wheel loader with 15.4 hours for $380,000 in Watford City, ND.

construction, oil, gas, farm and ranch

You can download our free app, Steffes

segments. Municipalities, logging

Price Guide, for a complete listing of all

The first place we look when marketing

and other businesses impacted by

auction prices. Now available in the Apple

this used equipment is to other active

supply chain issues and in need of

App Store and Google Play Store. w

from?

BAKKEN OIL REPORT – Fall/Winter 2021

BU YERS OF NON-OPER ATED WOR K ING INTER EST • 13 Years Of Experience In The Non-Op Space • Well Capitalized And Purpose Built Team

CONTACT: SCOTT RICE - SVP ENG & BD: SRICE@RBOIL.COM / 713-874-9005 COLIN BARNETT – LAND MANAGER: CBARNETT@RBOIL.COM / 713-874-9000