Bakken production decline may have begun
"Well, that didn't take long. According to a new report from North Dakota's Department of Mineral Resources, the state's oil production slipped 3.3% in January. That brought daily output from the state's prolific Bakken shale from a record high of 1.23 million barrels a day in December to 1.19 million barrels a day in January. This is clearly a sign of things to come, as producers in the play have dramatically cut back on investments in new wells, which will lead to further production declines throughout the year."
Read more: http://www.fool.com/investing/general/2015/03/14/north-dakota-oil-o...
Of course, this is a month over month number. The year over year numbers show that in Jan 2014, Bakken produced about 875,000 bbls per day, so a January 2015 number of 1,190,000 bbls per day is a pretty substantial year over year rise.
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
Views: 551
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on
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dbob, does the ND DMR provide data on how many wells are WOC? If there is a significant number of wells not completed or completed but not turned to sales that can be an important metric in predicting near term production levels. Some operators are continuing to drill wells but delaying completion ops. Completion can account for one half to two thirds of the total well cost so one way to maintain operations but reduce development budgets is to build a completion backlog. That also allows the operator to create a competitive bidding situation for pressure pumping companies that are experiencing a significant decline in business and need to maintain cash flow. Any meaningful decline in production could be short term and a wave of new wells coming online could create a spike in production. I wish articles like this would not leave so many important elements unaccounted for.
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Permalink Reply by Skip Peel - Mineral Consultant on
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I suspected that was the case. Thanks, dbob.
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Permalink Reply by dbob on
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Current WOC is about 750 wells. rig count is down to 111 as compared to 194 at this time last year. Current rig count is roughly 2010 levels, but increasing in drilling productivity per rig means it will bring on about 3x as much oil as in 2010, assuming wells are completed. http://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
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Permalink Reply by Skip Peel - Mineral Consultant on
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Yep, the production per well has increased in all the major unconventional oil plays from 2010 to present. The rig count no longer is a good metric for short term evaluation although it remains important long term. Newer well designs with longer laterals are not a good apples for apples comparison to 2010 well profiles. Thanks for providing the details to give a more comprehensive assessment.
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