First Shale Oil Domino To Fall: More To Follow

BY SRSROCCO

In a stunning news release, Continental Resources, the largest shale producer in the Bakken, is shutting in most of its production in the region.  That is one hell of a lot of output to shut-in as Continental Resources was producing over 200,000 barrels per day in the Bakken at the end of 2019.

From the data on Shaleprofile.com, Continental Resources had over 2,200 wells in the North Dakota and Montana Bakken producing oil and gas during February this year.  How many wells will Continental’s Harold Hamm shut in the Bakken??  And how many will be brought back online, at to what cost, when the market recovers??

According to Reuters, Continental Resources halts shale output, seeks to cancel sales:

April 23 (Reuters) – The largest oil producer in North Dakota has halted most of its production in the state, notifying some customers it would not supply crude at current pricing, according to people familiar with the matter.

Continental Resources Inc, the company controlled by billionaire Harold Hamm, stopped all drilling and shut in most of its wells in the state’s Bakken shale field, said three people familiar with production in the state. North Dakota is the second-largest oil-producing state in the United States after Texas.

This is terrible news for the U.S. Shale Oil Industry because $200 billion in debt is due over the next four years.  How are they going to repay this debt if shale companies stop drilling and shutting in production??

If we look at the top five shale oil producers in the Bakken, Continental Resources was clearly ahead of the pack:

This chart from Shaleprofile.com shows that Continental Resources produced more than 200,000 barrels per day in the Bakken at the end of 2019.  Hess, which is the second-ranked company, followed by a wide margin at 145,000 barrels per day.  Interestingly, the third-largest producer in the Bakken is Whiting Petroleum that just filed for Bankruptcy on April 1st.

I wrote about the COMING DISASTER in the U.S. Shale Oil Industry in my video which I published in May 2018:

I also highlighted Whiting Petroleum as one of the shale companies that would be in serious trouble in my article in August 2019:

With Whiting Petroleum currently trading at $1.13, it won’t be long before it heads into PENNY STOCK HEAVEN.  Already Oasis Petroleum, another RED FLAG I issued last year, is trading in PENNY STOCK HEAVEN at 61 cents a share.  Both of these stocks will be trading below 10 cents a share in due time.

So, why did Harold Hamm decide to shut down most of the company’s Bakken Production??  Two reasons.

  1. The price of North Dakota Light Sweet Crude is now trading at $7.27 a barrel.
  2. Harold Hamm didn’t hedge any of its Bakken oil production.

According to the prices on OilMonster.com, North Dakota Light Sweet Crude was trading for a whopping $7.27 a barrel yesterday:

Unfortunately, Harold Hamm played Russian Roulette with his Hedging Gun and lost BIG TIME.  It will be interesting to see how many of Continental’s wells will be turned back on in the future.  When horizontal shale wells are shut down, it could be costly to get them back, producing where they left off, if possible.  I have heard from sources in the industry that once shale wells are shut down, a large percentage of the time, they won’t return back to their original production level.

The Collapse of the U.S. Shale Oil Industry is now taking place in RAPID ORDER.  It’s highly likely that many of the older wells that are currently being shut-in may never come back online.

Continental Resources is the FIRST DOMINO in a series of shale dominos to fall in the Mighty U.S. Shale Oil Ponzi Scheme.

Falling oil production is bad for the U.S. Economy and Financial System.  This is why is crucial to own some physical precious metals to protect wealth in the future as most Financial Assets and Real Estate will lose a large percentage of their “perceived” value.

IMPORTANT UPDATE:  I had planned to put out a new video today, but won’t be able to release it until this weekend.

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