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Ron Patterson

Ron Patterson

Ron Patterson is a retired computer engineer. He worked in Saudi Arabia for five years, two years at the Ghazlan Power Plant near Ras Tanura…

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Oil Prices Taking Their Toll On North Dakota Production

The NDIC Bakken Production Data and the NDIC North Dakota Production Data is in. Production in the Bakken was down 11,941 barrels per day and production in all North Dakota was down 14,104 bpd. The numbers for January were revised slightly. January Bakken was down 35,064 from December and all North Dakota was down 36,331 bpd from December.

BakkenChart1

As I have pointed out before, the EIA’s Drilling Productivity Report, for some unknown reason, estimates the last six or seven months, when the actual data is available. In the above chart they estimate from October on. This throws their current numbers way off. The DPR data includes the Montana Bakken therefore their numbers will naturally be higher than the North Dakota data.

BakkenChart2

Of course the EIA DPR will eventually bring their numbers into what North Dakota is reporting. The above is what the eventual Drilling Productivity Report will look like. (In Orange). Here is the amount the historical DPR is off. Related: OPEC Boosting Production To Keep Pressure On U.S. Shale

Monthly Amount in BPD that the DPR is too High
Oct-14 15,085
Nov-14 32,514
Dec-14 16,096
Jan-15 76,031
Feb-15 112,075

From the Director’s Cut

Jan Producing Wells = 12,197
Feb Producing Wells = 12,198 (preliminary)(NEW all-time high)
9,208 wells or 75% are now unconventional Bakken – Three forks wells
2,990 wells or 24% produce from legacy conventional pools
Jan Permitting: 246 drilling and 0 seismic
Feb Permitting: 197 drilling and 0 seismic
Mar Permitting: 190 drilling and 0 seismic (all time high was 370 in 10/2012)
Jan Sweet Crude Price = $31.41/barrel
Feb Sweet Crude Price = $34.11/barrel
Mar Sweet Crude Price = $31.47/barrel
Today Sweet Crude Price = $36.25/barrel (lowest since Feb 2009) (all-time high was $136.29 7/3/2008)
Jan rig count 160
Feb rig count 133
Mar rig count 108
Today’s rig count is 91

The drilling rig count dropped 27 from January to February, 25 more from February to March, and has since fallen 17 more from March to today. The number of well completions dropped from 63(final) in January to 42 (preliminary) in February. Oil price is by far the biggest driver behind the slow-down, with operators reporting postponed completion work to avoid high initial oil production at very low prices and to achieve NDIC gas capture goals. There were no major precipitation events, 7 days with wind speeds in excess of 35 mph (too high for completion work), and 9 days with temperatures below -10F.

At the end of February there were an estimated 900 wells waiting on completion services, an increase of 75. Comparing December, January, and February completions and production increases results in a requirement of 110-120 completions per month to maintain production near 1.2 million barrels per day. Related: Latest EIA Predictions Should Be Taken With More Than A Pinch Of Salt

Notice Helms says wells producing increased by only 1 while well completions were 42. A lot of wells were shut in. And now there are 900 wells waiting completion. The fracking crews are not even working as fast as the drilling crews. And the rig count is down by over 50 percent.

BakkenBPD

Bakken barrels per day per well dropped to 122. That is the lowest since April 2011. All North Dakota bpd per well is at 100.

USLTO1

Jean Laherrere sent this and the below chart today. I found them interesting in light of the latest data from the LTO basins. The big one up top, LTO AEO 2015 preliminary, is interesting.

USLTO2 Related: Has The U.S. Reached “Peak Oil” At Current Price Levels?

AEO 2015 just came out and both these charts have been updated with the latest data.

I am at a loss to explain the EIA’s overestimation of US LTO production. The data for January was in from Texas and North Dakota yet they still have LTO production increasing through February and flat for March. They have to know that data is way off.

TenWeekAverage

Here is the weekly C+C production data as published by the EIA. The arrow marks January 2nd. And as you can see the weekly data has production increasing right through January and February. It did not and the EIA had to know that fact. The latest weekly data is at least 100,000 bpd too high and perhaps 200,000 bpd too high.

By Ron Patterson

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