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Page added on December 13, 2016

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Bakken Oil Production Up Over 70,000 BPD

Bakken Oil Production Up Over 70,000 BPD thumbnail

North Dakota just released their production numbers for the Bakken as well as for all North Dakota

bakken-bpd

The numbers are shocking. The Bakken is up 70,798 bpd to 991,722 bpd and all North Dakota was up 71,447 bpd to 1,043,207 bpd. The EIA’s drilling productivity report really missed the ball on this one.

bakken-bpd-per-well

Bakken bpd per well was up 6 to 91 while North Dakota bpd per well was up 5 to 79.

From the Director’s Cut

Oil Production

September   29,152,805 barrels =   971,760 barrels/day
October        32,339,403 barrels = 1,043,207 barrels/day
(preliminary)(all-time high was Dec 2014 at 1,227,483 barrels/day

Gas Production

September   48,356,772 MCF = 1,611,892 MCF/day
October     53,180,102 MCF = 1,715,487 MCF/day (preliminary)( NEW all-time high )

Producing Wells

September   13,378
October        13,457 (preliminary)(NEW all-time high)

Permitting

September   63 drilling and 1 seismic
October        82 drilling and 1 seismic
November    76 drilling and 2 seismic (all time high was 370 in 10/2012)

ND Sweet Crude Price

September   $32.98/barrel
October        $39.31/barrel
November    $34.58/barrel
Today           $40.50/barrel (all-time high was $136.29 7/3/2008)

Rig Count

September   34
October        33
November    37
Today’s rig count is 40 (all-time high was 218 on 5/29/2012)

Comments: (Bold mine)

The drilling rig count decreased one from September to October, then increased three from October to November, and is currently up three from November to today. Operators are shifting from running the minimum number of rigs to incremental increases throughout 2017, as long as oil prices remain between $50/barrel and $60/barrel WTI.

The number of well completions dropped sharply from 73(final) in September to 45(preliminary) in October. Oil price weakness that is the primary reason for the slowdown is anticipated to last into the second quarter of 2017.

There was one significant precipitation event, eight days with wind speeds in excess of 35 mph (too high for completion work), and no days with temperatures below -10F.

Over 98% of drilling now targets the Bakken and Three Forks formations.
Estimated wells waiting on completion2 is 860, down one from the end of September to the end of October. Estimated inactive well count3 is 1,503, down nine from the end of September to the end of October.

Crude oil take away capacity remains dependent on rail deliveries to coastal refineries to remain adequate.

Low oil price associated with lifting of sanctions on Iran, a weak economy in China, and the Brexit are expected to lead to continued low drilling rig count. Utilization rate for rigs capable of 20,000+ feet is 25-30% and for shallow well rigs (7,000 feet or less) 1520%.

Okay, in September well completions were 73 and production fell by over 10,000 bpd. In October well completions fell by almost 40% to 45 while production increased by over 70,000 bpd. Would someone please explain how this is possible?

The following data from the EIA’s Drilling Productivity Report which came out Monday. The actual data is through September while their projections are through January 2017.dpr-total-shale

The EIA believes Total US Shale production will level out at about 4.54 million bpd in January. That will be down just over 900,000 bpd from its peak of 5.46 million bpd in March 2015.

dpr-bakken

As you can see they missed the Bakken October production by a country mile.

The EIA counts the Bakken as all North Dakota plus the Bakken area of Montana. Though all North Dakota production is not all Bakken, it is all within the Bakken area. That is, conventional wells within the Bakken area is counted as Bakken production even though North Dakota separates the two.

dpr-eagle-ford

The big shale loser is Eagle Ford. The EIA says they will drop below one million bpd in January to about 980 thousand bpd. That, if correct, will put them down over 724 thousand bpd since the March 2014 peak.

dpr-permian

But the Permian saves the day as far as shale is concerned. The EIA has the Permian increasing by over 37 thousand barrels per day in January and up almost a quarter of a million barrels per day since total shale peaked in March 2015. Of course the EIA is counting all production within the Permian ares, conventional as well as shale production.

Bruno Verwimp just posted me the following two graphs. As you can see his latest data point, October, still falls on his predicted decline curve

bruno-1

bruno-2

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2 Comments on "Bakken Oil Production Up Over 70,000 BPD"

  1. Nony on Tue, 13th Dec 2016 8:59 pm 

    Continental (and some other producers) choked back some wells and even took them off production when prices were lowest. This is public (look at news reports, investor calls, etc.). Helms also referred to this in an interview that was quoted in news articles.

    No reason to expect continued increases. This is just a blip coming because the previous months were inordinately low and the pressure built up for a big rise when wells brought back to service. No reason to spazz out when oil drops 50K or goes up or whatever on a monthly basis. The key is that for several months, average decline has been a little under 20,000 bopd per month. Look at it for a few months long and the little blips fade into chatter and you see the trend.

  2. rockman on Wed, 14th Dec 2016 12:16 pm 

    “…in September well completions were 73 and production fell by over 10,000 bpd. In October well completions fell by almost 40% to 45 while production increased by over 70,000 bpd. Would someone please explain how this is possible?”

    Haven’t worked the numbers but as Nony points out if operators chocked back production (as the Rockman has done on a few wells) hoping for higher prices they can open back up for a number of reasons. Such as losing hope for much higher prices and needing more revenue to pay debt and/or keep their doors open. Also don’t forget: much of the production is owned by publicly traded companies that would be very happy to report higher 4th quarter earnings to the shareholders next month.

    A clue might be seen in the higher rates per well.

    And a variety of other operation factors. Next month the Rockman will increase production in one field by over 100%. And do so with no new wells or completions. Next month when my salt water disposal well is completed I’ll be able to get rid of the huge amount of water produced with the oil much cheaper. Much cheaper then hauling it by truck to a SWD company that will charge me a few $’s per bbl to inject.

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