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A pump jack pulls crude oil from the Bakken region of the Northern Plains near Bainville, Mont. on Nov. 6, 2013.Matthew Brown/The Canadian Press

A $3.8-billion (U.S.) takeover in the North Dakota Bakken has focused attention on operations in the red-hot region by a pair of Canadian companies – and they are headed in opposite directions.

Baytex Energy Corp. is re-evaluating its position in the Bakken shale, while Enerplus Corp. has gone all-in, directing 40 per cent of its 2014 capital spending to its holdings there.

On Sunday, Whiting Petroleum Corp. said it will buy Kodiak Oil & Gas Corp. in an all-stock deal to create the largest producer in the region, where output recently surpassed one million barrels of a day. When combined, the two Denver-based companies will unseat Continental Resources Inc. as the dominant operator in the basin.

Despite the industry's continued gains in North Dakota, executives with Calgary-based Baytex have talked about rethinking the company's Bakken holdings as part of a portfolio review following its newly completed $1.8-billion acquisition of assets in the Eagle Ford in Texas, another major U.S. shale play. Proceeds from any asset sales would be put toward debt reduction.

Baytex acquired the Bakken acreage in 2008, and currently produces around 3,200 barrels a day from 61,400 net acres there.

The Whiting-Kodiak deal likely does not boost the potential value of Baytex's holdings, but it puts the region's overall potential back into the spotlight, said Dirk Lever, analyst at AltaCorp Capital Inc.

"Whether the Whiting-Kodiak deal got done or not, there's a ton of interest down in that area," Mr. Lever said.

Enerplus, meanwhile, had big production gains in its Bakken properties in what is known as the Williston Basin. Production is forecast to average 22,000 barrels a day this year, up more than fourfold in the past three years.

In fact, half of the company's production comes from its U.S. operations, which also include properties in the Marcellus shale gas formation.

"We've seen production grow and it's all been organic because [Enerplus] just bought land, not production," Mr. Lever said.

Last month, Enerplus chief executive Ian Dundas told analysts that the company had initially believed its acreage would yield eventual production upside of 25,000 barrels a day, but that it now stands at 50,000.

"The pace is going to depend upon drilling rigs and well counts and the development plan we settle into," he said. "But that potential for more than a double from where we are now is quite meaningful."

There have been some warnings that growth in production of the Bakken light oil could hit a wall, due partly to constraints in equipment and manpower. But the precise location of that limit remains unknown, as monthly production statistics keep climbing.

North Dakota's oil production hit a record 1.04 million barrels a day in May, up 28 per cent from the same month in 2013, according to the state's Department of Mineral Resources. Monthly average output has nearly quintupled in the past five years on rapid adoption of hydraulic fracturing and horizontal drilling.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 18/03/24 4:00pm EDT.

SymbolName% changeLast
BTE-N
Baytex Energy Corp
+1.2%3.38
BTE-T
Baytex Energy Corp
+1.33%4.56
ERF-N
Enerplus Corp
+1.86%18.63
ERF-T
Enerplus Corp
+1.98%25.22
R-N
Ryder System
+1.42%113.88

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