News from around the Bakken – 7/27
Williston city and Williams County are working to cut back mancamp housing, which will have the expected unintended consequence of putting upward pressure on housing prices. The new airport in Williston is moving forward. Biggest news is indication that newest wells aren’t seeing production deplete as rapidly as in the past.
I have a lot of work to do in the next few days and have to trim my blogging time. Don’t have time to read the underline article referred to in the following discussion at MDW, but need to mention it because something big seems to be happening:
7/27 – Million Dollar Way – Notes From Mike Filloon’s Most Recent Seeking Alpha Article On The Bakken And Mega-Fracks – Indications from recent wells are the notorious Bakken decline rate is not present. One well which had huge initial production (IP) is still running at the IP level a year later. If that bears out as a general pattern the ramifications are huge. Lots and lots more highlights in the MDW article.
MDW article says three times that new wells don’t produce like older wells.
7/6 – KX News – Future Development for Sloulin Field – Construction of new airport northwest of town is expected to start in spring 2016. Cost is estimated at $250M. Current airport will be sold producing unknown proceeds to offset the cost. With 800 acres in the central part of town that will allow a lot of development. Good background in the article.
Outbound passenger traffic only increase 10% in June compared to prior year. This is a drop from the 20% year-on-year increase that had been normal a year ago.
Contrast that with any economic indicator in your area. Is a slow down in your community a 10% increase compared to 20% a year ago?
7/22 – Bismarck Tribune – Williams County vote to cut back crew camps – Housing in Williston is catching up with the number of people in the area. This is in part due to slowdown in drilling but more significantly because of the large volume of apartment units completed or under construction.
As a result the County commission approved guidelines to cut back and eventually phase out temporary housing.
There have not been any new man camps approved in two years. The current ones are slowly closing down. In 2012 there were around 8,000 beds in mancamps around Williams County. Currently there are 4,179 beds licensed in the county but the estimated occupancy of those facilities is around 2000. Expectation at the county level is the number of large camps will drop from current 18 to 7.
Rob Port quite accurately notes the impact at SayAnythingBlog.com: Oil Patch County Boots Man Camps, Ensure That Rents Stay Higher For Longer. Cutting the supply of housing by government dictat will push people into the apartment market, thus driving up costs. When the drilling activity picks up, there will again be housing shortages, prices will go skyhigh, and people will be living in their cars again.
And the county and city officials will insist they have no idea how that happened, insisting they had nothing to do with it.
In the meantime, housing prices will not fall as much as everyone expects. I hear tell that is already the case – prices are not dropping much.
Expected but unintended consequences.