Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Archive for the category “Energy”

18 May 2020

Oil production dropping in North Dakota; not yet visible in March data.

Production data in North Dakota is routinely released on about the 15th of each month reflecting data for the second previous month.  So the info just released on May 15, 2020 reports the March 2020 activity.

The radical drop in price due to the demand shock and supply shock will show up in production data for April, expected to be released about 6/15/20.

5/15/20 – Williston Herald – Helms: North Dakota crude has probably fallen below 1 million barrels, but March figures don’t yet reflect it – The head regulator, Lynn Helms, thinks that production in the state is currently below 1 million barrels a day. The May data won’t be released until July.

Read more…

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20 Apr 2020

Magic of the price signal to change production levels.

Fourteen wells on one pad, located on the southeast side of Williston, N.D. Photo by James Ulvog.

The double black swan of COVID-19 pandemic from the demand side and Saudi Arabia flooding the market from the supply side is creating a sales problem and storage problem for the oil industry.

Regulators in Texas are thinking about about ordering a pro-rate reduction in production. In other words, they are considering giving each producer an order on how much to cut.

North Dakota has no such plans.

North Dakota is planning to rely on capitalism to rapidly adjust production.

Read more…

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18 Apr 2020

North Dakota oil production in February 2020, before dropping due to pandemic and OPEC flooding market

Night sky in Williston, N.D. Long exposure photo by Joe U. Look at all the stars.

In February 2020, crude oil production in North Dakota averaged 1,451,029 bopd (preliminary), up 20,518 bopd from 1,430,511 bopd (revised) in January.  This is the 4th highest level of output, behind the high water mark of 1,519,032 bopd in November.

Production is going to drop rapidly. Drop will be at least 20% of current production. I’ll make a not-so-wild guess decline will be a quarter or more (>25%).

Prices have collapsed due to a double black swan. The COVID-19 pandemic has caused a demand side shock.

There is also a supply side shock to the market.

Read more…

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17 Apr 2020

Crude oil production levels in North Dakota in February 2020.

Photo by James Ulvog.

Following charts show the production levels in the state before the double black swan events of pandemic and price war hit the market.

Next post will discuss the production levels and those two black swans.

Production in state and Bakken only:

For longer term perspective: Read more…

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18 Mar 2020

Oil production in North Dakota shows usual drop in January 2020. Price takes a nose dive.

Workover rig in place. Flaring of gas visible. Lots and lots of room for more wells. Photo by James Ulvog.

Uh oh.

Production in North Dakota dropped in January, which is typical. Look at the production chart and you can pick out each of the winters because production usually falls off.

However, the price has fallen through the floor, courtesy of Saudi Arabia and Russia kicking off a price war and declaring they will flood the market with increased production.

Crude oil prices dropped in February and have continued in free fall during March. Prices on 3/17/20 per the Director’s Cut report are all the way down to $18.50 for North Dakota light sweet and $23.60 for the North Dakota market estimate.

Production in January 2020 dropped to 1,429,515 bopd (preliminary), off 47,262 bopd from January (revised) and down 89,515 bopd from December’s record high.

Price data:

 

Production data since 2008:  Read more…

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25 Feb 2020

Oil production in North Dakota for 2019.

Producing well with pumpjack in the foreground. Drilling rig in background. Two more pads between them.  Photo by James Ulvog.

Release of the December production data in North Dakota lets us look at production for the full year.  Following graphs show the average daily production and total for the year. Multiplying the monthly data by the sweet crude price in North Dakota reported in the Director’s Cut lets us see the value of production by month and total value for the year.

Read more…

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19 Feb 2020

North Dakota oil production in December 2019 is fourth highest level on record, after setting new production level in 5 of last 6 months.

Workover rig working on well in North Dakota. Photo by James Ulvog.

North Dakota oil production in December 2019 is fourth highest level on record, after setting new production level in 5 of last 6 months.

Average daily production in the state was 1,475,685 barrels of oil per day (bopd) (preliminary) after hitting the highest level ever of 1,519,037 bopd (revised) in November. The November production broke the state’s record for the fifth time in six months, and the twelfth time in the last twenty months.

The routine record-level production is being achieved with stable and low level of drilling rigs and without the wild-west craziness in the local economy that existed before 2014.

Graph of the average daily production in the state and in the Bakken pool:

Read more…

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18 Oct 2019

North Dakota breaks record oil production level for three months running.

Photo by James Ulvog.

Crude oil production in North Dakota has broken a record for three months in a row. This is not a record breaking number of record breaking months though. In the post-bust time since 2014, the record number of record levels was July 2018 through October 2018, or four months in a row. Back then production was 1.27m bopd in 7/18, 1.29m, 1.36m, and 1.394m, before sliding a bit to 1.378m in 11/18.

Production was 1,477,394 bopd (preliminary) in August 2019, up 2.18% from 1,445,934 bopd in July.

Check out the production trend:

Read more…

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17 Sep 2019

In July 2019, North Dakota oil production breaks record for second month in a row.

Four of the reasons oil prices are *not* completely crazy after the attack on Saudi Arabia’s processing facilities this past weekend. Photo by James Ulvog.

The Million Dollar Way blog points out With The July, 2019, Data, North Dakota Set Four New All-Time Records.

In July, the state energy wizards set four record levels of production:

  • Crude oil
  • Gas
  • Barrels of oil equivalent (converting gas into equivalent amount of oil and combining with crude production)
  • Number of producing wells

Breaking production records in North Dakota, New Mexico, and Texas is something to celebrate if you like being able to get gasoline for your car whenever you feel like doing so, or if you like having gas available at reasonable prices in spite of when, oh, say, someone drops a bunch of bombs on Saudi production facilities.

Read more…

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31 Aug 2019

Where is he now? Keith Graves, star of “The Overnighters” documentary

If you were reading my blog a few years ago, you recall lots of discussion of the documentary The Overnighters. The movie provides one perspective on the oil boom in Williston, North Dakota.

As you may recall, one of the main characters was a fellow by the name of Keith Graves. He was identified by the director as one of the individuals who “survived” the tumult seen during the time the movie was filmed. If you want to catch up on his story, check out this link.

Where is he now?

Federal prison.

Read more…

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16 Aug 2019

Two percent increase in North Dakota oil production in June 2019.

Photo by James Ulvog.

Oil production in the state increased 2.15% in June, growing an average of 30,004 bopd, from 1,394,648 bopd average in May (revised) to 1,424,652 in June (preliminary). That is after a lull from October 2018 through May 2019, when the average production increased a mere 648 bopd.

Before showing the production graph, a few comments about prices and rigs in operation.

Prices have declined substantially in the last couple of months:

  • Sweet crude in North Dakota
  • $48.00 March
  • $52.50 April
  • $50.50 May
  • $43.10 June

The drop, especially in June, shows up in the value of crude production:

The productivity of wells has increased over the years. The result is the count of completed wells is largely independent of the number of drilling rigs in operation.

Consider an overlay of the completed well count and the rig count:

Read more…

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17 Jul 2019

North Dakota oil production remains steady in May 2019.

Photo by James Ulvog.

Oil production in North Dakota increased slightly to average of 1,393,284 BOPD in May 2019 (preliminary), up 799 BOPD from April (revised).

Rig count has been flat, ranging from low of 61 to high of 67 during the last 12 months.

An odd factor this month is small increase in production (up 799 bopd/day, 0.06%) with increase in producing wells of 194 (+1.26%).

Lynn Helms is cited in article at Bismarck Tribune (7/16/19 –Oil Production steady in May, but transportation woes persist) suggesting this is due to old legacy wells that produce around 25 barrels a day being closed in for the winter and then brought on-line from late spring until fall.

Economic driver explaining this is the costs of plowing roads and hauling oil makes such wells uneconomical in the winter. Thus they are taken off line in the winter.

The number of inactive wells dropped by 69 in May.

The two month changes are:

  • 141 – drop in inactive wells
  • 185 – well completions
  • 337 – increase in producing well count

That leaves an increase of 11 producing wells that isn’t explained by drop in inactive wells and completions.

Here is what the average production looks like:

Read more…

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16 Jul 2019

North Dakota oil production expected to accelerate this year. Also two more new huge oil finds where oil wasn’t expected.

Photo by James Ulvog.

Latest guess, from someone who has a clue about such issues, on where production is going in North Dakota is somewhere around 1.5M or 1.6M barrels a day late this year or early next year.

Huge finds off coast of Guyana and in New Mexico/Texas.

Question needs to be asked again:  What Peak Oil?

 

The Million Dollar Way – 7/7/19 – ND Oil Production to Surge – Lynn Helms. Citing another source, the article says Lynn Helms, director of DMR, thinks production in North Dakota will surge later this year after gas infrastructure construction is done.

Read more…

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30 Jun 2019

US hits all time record high for oil production, is now net oil exporter, and is set to surpass Saudi Arabia in export of crude & oil products.

16 reasons US has been moving towards a net exporter of energy and finally hit that point. Well visible right of center with Missouri river in background. Williston, North Dakota. Photo by James Ulvog.

The changes in energy production over recent years is astounding.

My blogging has dropped off a lot over the last year or so due to distractions. Have a huge backlog of things to discuss, such as:

  • The US is a net oil exporter
  • Oil production in US is at all time record high
  • Sometime later this year the US will be exporting more oil product than Saudia Arabia

MSN – 12/7/18 – US ends its reliance on foreign oil for the first time in 75 years – In the last week of November 2018, the US exported more oil than we imported. The US is now a net exporter. Ponder that.

Read more…

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15 Jun 2019

Last 12 months are best ever for oil production in North Dakota. Oh, what peak oil?

Photo by David Ulvog. Used with permission.

Record high level of oil production in the state was 1,403,844 barrels of oil per day (bopd) in January 2019. April production averaged 1,391,188 bopd (preliminary).

Before the slump in prices and drilling, the record high was 1,229.572 bopd in December 2014.

Since production bottomed out at an average of 942,322 bopd in December 2016, production has been climbing.

Production in June 2018 and every month since then has been above the December 2014 level. Even with winter weather, production has been in the neighborhood of the 1.4M bopd level for the last eight months, apart from small drop in February.

Graph of average production in the state and Bakken formation since 2008:

Read more…

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