[copious.abundance]

Keep in mind that it often slides or flatlines during the winter anyway.

That said, I wouldn't be surprised at this point if it leveled off even during the spring, unless oil prices rebound pretty quickly.

[Beery1]

Here was a really funny one. We're two years into your 3-year timeline!
Posted Jul 31, 2012

Over the next three years, I'm getting a big bowl of popcorn and I'm going to watch the cornies backpedalling and denying as their dreams of abundance and energy independence evaporate. It's going to be awesome! I wonder how they'll spin it when their fantasies are laid bare?

Copious.abundance's premature (and ultimately ironic) crowing is always a lot of fun to revisit. Here we are, coming up to the deadline, and while it's clear the Bakken has peaked and the cornies should be backpedaling like crazy, they're only toying with turning the pedals the other way, i.e.:

Keep in mind that it often slides or flatlines during the winter anyway.

I wouldn't be surprised at this point if it leveled off even during the spring.

LOL. Yeah - it might just be seasonal fluctuations. Right - keep telling yourself that. Whatever happened to that fantastickal horn of plenty that the Bakken seemed to be in the heady days of 2012? Oh, that's right - it got slapped with the can of whup-ass that is reality.

So no serious backpedaling, but the cornies do still seem to be in denial big time - that force is always strong with these folks, LOL. It's a lot of fun to watch and the popcorn tastes good.

Yeah, 6 weeks early, but I'm calling it - totally got this one right in 2012.

[copious.abundance]

As I said above, he irony of certain doomers proclaiming a lack of abundance when the price of oil has been telling them otherwise, cannot be overstated.

As proof of how desperate he is to proclaim himself right, he's resorted to declaring that a mere leveling off of production is somehow a failure of abundance. Really pretty sad.

[Beery1]

Bakken numbers are in for the month. I'm still seeing that the peak was in 2014.

[Tanada]

EIA report in graphic form,

http://www.eia.gov/petroleum/drilling/pdf/bakken.pdf

[PeakOiler]

Well, I decided to post the graph using EIA data through April, 2015:



Time will tell if the highest peak in the graph is THE peak for North Dakota.

I will delete the earliest monthly point as the newest monthly point is added.

See http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm

[copious.abundance]

There has been an ongoing thread about the Bakken for several years now.

[Tanada]

I expect North Dakota to decline to something like 600,000 bbl/d by the time of the election next year. Not sure what President Obama's legacy is going to look like in the history books.

[Outcast_Searcher]

I expect North Dakota to decline to something like 600,000 bbl/d by the time of the election next year. Not sure what President Obama's legacy is going to look like in the history books.

So Obama's legacy is tied to North Dakota oil production, or fracking or tight oil in general?

That's funny. I thought is legacy was tied to screwing bond holders (like GM bonds and bonds tied to student debt) in order to score political points and of course, punish "the rich", as though he weren't well off.

[Tanada]

I expect North Dakota to decline to something like 600,000 bbl/d by the time of the election next year. Not sure what President Obama's legacy is going to look like in the history books.

So Obama's legacy is tied to North Dakota oil production, or fracking or tight oil in general?

That's funny. I thought is legacy was tied to screwing bond holders (like GM bonds and bonds tied to student debt) in order to score political points and of course, punish "the rich", as though he weren't well off.

Well the President has been touting the increase in crude oil production as one of the great things that took place over the last seven years thanks to his policies.

When all those miracle oil companies start going bankrupt en mass he will have a choice, say it is the greedy investors own fault for over extending themselves, or come up with an explanation why things turned out differently than predicted that shifts the blame to someone else.

[shallow sand]

I'd say based on Whiting Petroleum's second quarter report, we have seen peak North Dakota Bakken production. Whiting is the number one producer in the North Dakota Bakken.

Although Whiting's release was company wide, vast majority of their production is in Bakken of ND. They produced 170K BOE per day in Q2. They forecast that to fall to an average of 153K BOE per day in Q4 and hope to average 146K BOE per day in 2016, assuming oil prices stay low.

They will spend $2.15 billion in CAPEX in 2015, but already spent $1.56 billion of that in the first half of the year. After completing 186 net wells in the first half of the year, will complete 65 range in second half of 2015.

Surprisingly they spent more CAPEX per well in Q2 than Q1 of 2015.

The kicker, they spent $2 in CAPEX for every $1 in free cash flow in Q2, yet production only raised 2%. To be cash flow neutral and keep production at 170K BOE per day I estimate Whiting needs $90-95 WTI oil price.

If you do not believe me, go look at their website yourself. $90+ is the breakeven for Whiting to maintain 170K BOE per day. Since WTI is in the high 40s, their production is going to shrink. They are pulling two more rigs from the Bakken.

SM Energy is also pulling two rigs from the Bakken and will see production drop.

Hess is apparently going to continue to burn cash in the Bakken.

Next week will see what Continental and Oasis report.

[ennui2]

When all those miracle oil companies start going bankrupt

Is there really going to be a wave of sympathy for oil companies going bankrupt? The political blowback from that would be minimal. Cognitive dissonance or not, people care about the price of gas but they have no love for BigOil, including most lower to middle-class Republicans.

As for policies, Obama went through the election in 2008 on the wave of chants to "drill, baby, drill" from the likes of Palin (supported by Pstarr, who now sheds crocodile tears about AGW). Obama tried to discourage off-shore drilling by saying there were plenty of places to drill in the continental US, and that all oil companies had to do was stick more holes in the ground. So that's what they did. I'd say he followed a moderate path of giving the public as much of what they wanted as possible without going too far.

I also remember an Obama interview before the election where he talked about the psychological see-saw of people's attitudes about oil, where when it's high, they downsize their cars and think about renewables, and when it comes down, they go right back to buying SUVs. There's only so much a president can do to stop that. We already have stricter CAFE standards on the way, standards so high that the industry doesn't even know how they will meet them with pure ICE vehicles.

http://www.popularmechanics.com/cars/a7 ... d-by-2025/

[ROCKMAN]

PeakOiler - Nice chart...thanks. Folks should note that production leveled off long before the steep drop in oil prices. And also don't forget the lag time: that dip in production 1Q 2015 came from wells drilled in the last half of 2014. We're just starting to see the reaction on the production side from the drop in rig count earlier this year.

[Outcast_Searcher]

I expect North Dakota to decline to something like 600,000 bbl/d by the time of the election next year. Not sure what President Obama's legacy is going to look like in the history books.

So Obama's legacy is tied to North Dakota oil production, or fracking or tight oil in general?

That's funny. I thought is legacy was tied to screwing bond holders (like GM bonds and bonds tied to student debt) in order to score political points and of course, punish "the rich", as though he weren't well off.

Well the President has been touting the increase in crude oil production as one of the great things that took place over the last seven years thanks to his policies.

When all those miracle oil companies start going bankrupt en mass he will have a choice, say it is the greedy investors own fault for over extending themselves, or come up with an explanation why things turned out differently than predicted that shifts the blame to someone else.

Fair enough. But let's not forget the blocking of the Keystone pipeline. (As though trains were a low (compared to pipelines) GHG oil transport mechanism, and as though trains didn't have a HORRIBLE safety record as far as transporting oil.

And (like many things), it's not like Obama had a fundamental impact on things like fracking technology, but all politicians like to take credit for things that happened during their tenure, even if their policies had little or nothing to do with it. Politics -- I get that.

I agree that the oil companies which bought too many assets and left themselves too leveraged SHOULD go bankrupt -- though Obama's party isn't too big on having economic consequences follow foolish behavior that EARNS bad consequences. (i.e. the left wing playbook on personal responsibility is basically to pretend there is none).

So, I'd expect him to blame any oil company financial problems on mean old republicans in general, or (somehow) Dubya in particular. Of course, heaping blame on "greedy" investors for "unfair" profits is also a favorite meme of the left, so Obama will have lots of easy blame shifting, should many such companies go bankrupt. Even while crowing that he gets all the credit for low oil prices. Wow. Isn't politics great?

[Cog]

Its Bush's fault is the standard goto answer.

[jesus_of_suburbia]

Are you my mother-in-law?

[PeakOiler]

PeakOiler - Nice chart...thanks. Folks should note that production leveled off long before the steep drop in oil prices. And also don't forget the lag time: that dip in production 1Q 2015 came from wells drilled in the last half of 2014. We're just starting to see the reaction on the production side from the drop in rig count earlier this year.

Thanks ROCKMAN. Just so that readers are aware, the link I gave above to the EIA US Oil Production website has links to oil production charts of any of the States. Just select and click on the date-range link on the right hand side of the table. I did not see a link to the Bakken oil play, LOL, hence the new thread title. I will customize the chart above (change the date range) as time goes by, then post the new chart. Maybe quarterly. And perhaps next year I'll start the thread titled "Declining Production in Texas"

[Tanada]

PeakOiler - Nice chart...thanks. Folks should note that production leveled off long before the steep drop in oil prices. And also don't forget the lag time: that dip in production 1Q 2015 came from wells drilled in the last half of 2014. We're just starting to see the reaction on the production side from the drop in rig count earlier this year.

Thanks ROCKMAN. Just so that readers are aware, the link I gave above to the EIA US Oil Production website has links to oil production charts of any of the States. Just select and click on the date-range link on the right hand side of the table. I did not see a link to the Bakken oil play, LOL, hence the new thread title. I will customize the chart above (change the date range) as time goes by, then post the new chart. Maybe quarterly. And perhaps next year I'll start the thread titled "Declining Production in Texas"

So are you folks saying that the peak number of sweet spots in Bakken had already been drilled by mid 2014, so the only way to keep production growing was improved technique? Or am I misinterpreting what you are trying to tell us?

[ROCKMAN]

T – “So are you folks saying that the peak number of sweet spots in Bakken had already been drilled by mid-2014…?” I would say it this way: the most promising looking locations in every play are drilled first. Also the better producing areas via vertical wells in the Bakken have been known for decades so they were focused on first. Of course not all the “best looking” prospects work…hence dry holes and non-commercial producers. And some doggy looking projects do turn into gems.

It’s easier to describe what has gone on in the EFS. As the learning curve developed as to sweet vs sour spots those that had the better acreage drilled them up. But what to do with the less promising locations? Simple: using the same tech but apply more of it. Thus laterals went from 2,000’ to 5,000’+ and frac stages went from several to 36+. This gave the appearance of more sweet spots then there really were. But at a cost: running around $4-5 million in the early days to $10+ million last year. But now with the drilling slump prices have come down a good bit. But, of course, so has the price of oil.

No one has any tech on the board today that’s going to improve the process. And as far as higher oil prices eventually bring a lot of new wells on? A number of reasons to not expect it to happen to a significant level. First, there will be a lot fewer operators in the game. And those that survive won’t have much cash flow or credit lines to toss much capex into the pot. And there will be much fewer service companies, hands and equipment available. Many of those shops are shutting down permanently and the equipment being scrapped.

But it all boils down to the same dynamic: ROR. So lower costs help offset lower oil prices to a degree. And apply drilling longer laterals with more frac stages help make poorer locations look better. But in the end there are a finite number of locations that will be drilled at any price point. Sometime in the future when oil gets back to $100/bbl there will be few shale play locations left to drill because the worthwhile ones have already been tapped. And until that time the currently producing wells will continue their depletion cycle and it will take even more drilling to return to the peak in every trend.