The rising oil production from North Dakota’s Bakken Formation now equals that of Alaska’s Prudhoe Bay for the first time, according to the Wall Street Journal, due to technological breakthroughs such as fracking.
The recent surge in oil prices from under $80 a barrel last summer to over $110 per barrel in February has prompted a flurry of activity by oil producers to get in on the action. The price of leasing properties thought to hold millions of barrels of reserves has exploded, in some cases tenfold, in Pennyslvania, Texas and elsewhere. These are prices not seen since before the onset of the Great Recession in 2007, with Chinese, French and Japanese explorers committing $8 billion just in the last two weeks to secure oil leases.
Marubeni Corporation, a Japanese commodity trader, agreed to pay $25,000 an acre for a piece of Hunt Oil Company’s Eagle Ford shale property in Texas, while Marathon Oil closed on a lease nearby at $21,000 an acre. Leases in Utica shale in Ohio and Pennsylvania jumped ten-fold in just five weeks to $15,000 an acre.
Others, such as Exxon Mobil and Royal Dutch Shell are reconsidering deep-water discoveries in West Africa and in the Gulf of Mexico now that new technologies are making access to them more attractive.