New Investments In The Bakken Invite Concerns About Safety Among Low Oil Prices

Reduced oil prices were naturally followed by a decrease in drilling in the Bakken at the end of 2015, as less profit potential has led some companies to suspend activity. Some enterprising companies with capital to spare, however, are using the opportunity to double down on investments in the region while demand and cost for land and contracts are low. This has created an environment ripe for concern about whether safety will take a backseat to profits as companies seek to recoup investors' funds.

According to The Bakken Magazine, a group of former Houston oil executives know as the UpCurve team, for example,"...has announced their efforts to acquire acreage, wells or assets in the Bakken." UpCurve, who are backed to the tune of $100M by Post Oak Energy Capital, are not alone. In December 2015, the recently formed Angelus Private Equity Group announced the acquisition of "...9,750 net acres...in Montana and North Dakota...for roughly $10 million."

In light of these significant investments concerned citizens or policy makers might be led to worry whether lower profit margins caused by reduced oil prices might tempt companies to cut corners when it comes to safety in the interest of increasing production. After all, the Bakken has been no stranger to workplace injuries in the past which comes as no surprise given then analysis of Teresa Van Deusen about her time working as the safety specialist for oil company WPXEnergy. According to Van Deusen, "Workers...have the go-get em kind of attitude,...They think, ...I can do this little shortcut.’ Well, when you’re working with the pressures and dangers that are inherent to the oil field, you can’t do shortcuts."

Whether new investments in the Bakken sparked by a decrease in oil prices will lead to unnecessary injury remains to beseen, but one thing is certain. The pressure to recoup investors' capital will be high and lower profit margins will have to bemade up one way or another.

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