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Ron Patterson

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Oil Output Continues To Fall In North Dakota

crude oil barrels

The North Dakota Industrial Commission (NDIC) reported June crude plus condensate (C+C) output on August 12, 2016. North Dakota(ND) Bakken/Three Forks (BTF) output fell by 20.46 kb/d in June to 973.86 kb/d. Overall ND C+C output fell to 1026.58 kb/d in June, a decrease of 185.2 kb/d in the past 12 months. Based on data from Enno Peters, 43 new wells started producing oil in June 2016.

I pulled the charts below from shaleprofile.com (Enno Peter’s website).

(Click to enlarge)

The chart above shows the number of new wells that started producing each month in North Dakota. The chart that follows shows the number of wells in North Dakota that started the drilling process each month.

 

(Click to enlarge)

The number of drilled uncompleted (DUC) wells (chart above) has not changed very much since 2014 and the latest estimate is about 924 DUCs in the ND Bakken/TF. At some point these wells might be completed if oil prices rise above $70/b, whether that ever occurs is unknown, my guess is that oil prices are likely to be above $70/b within about 12 months (by August 2017).

My simple Bakken model using estimated future well profiles consistent with the average 2014-2015 well and with cumulative output of about 300 kb over 20 years (similar to the 2008-2013 average well) underestimates actual ND Bakken/TF output from Oct 2015 to June 2016 by an average of 56 kb/d over that 9 month span. In June the model predicts 920 kb/d, about 55 kb/d too low, but at some point sweet spots will become fully drilled, new well estimated ultimate recovery (EUR) will decrease, and the model may match actual output more closely when that occurs.

I present three scenarios that assume the well profile will not change, the low scenario assumes 43 new wells per month are added from July 2016 until Dec 2018, the high scenario assumes 125 new wells per month are added each month from July 2016 to Dec 2018, and a medium scenario with 85 new wells per month added from July 2016 to Dec 2018. Depending upon oil prices my expectation is that ND Bakken/TF C+C output will fall somewhere between the high and low scenarios, the “medium scenario” is not a best guess, but simply an intermediate scenario.

(Click to enlarge)

By Dennis Coyne via Peak Oil Barrel

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