Outrun Change

Oil production in North Dakota in January 2019 only a smidgeon below record level in prior month.

There is another pumpjack to the right of the most visible one. There are two more on the distant horizon. Photo by James Ulvog.

Preliminary production in January is 339 barrels a day below the revised amount for December. Here is how close January’s output came to the record high in December:

• 1,402,741 – December 2018 – record high
• 1,402,402 – January 2019 – preliminary

Production data usually changes in the month following initial release. The pattern I’ve noticed is a data for a well or three arrives after the cutoff for the monthly report. So, late reporting for a few wells could push the January 2019 data into record territory.

Before showing a graph of production, wanted to bring in some new data reported by the state regulator. The “Director’s Report” lists the average price for sweet crude in the state and has done so for many years. The report just started listing the average of West Texas Intermediate (WTI) pricing for the month.

There is a discount from the price realized in North Dakota compared to WTI because of the cost of transport. That spread, so I understand, has fallen since the DAPL was completed. Here is a revised graph of average price in ND to include an average of WTI:

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North Dakota oil production hits another record in December 2018

Photo by James Ulvog.

Average production of crude oil in North Dakota rose 1.79% in December 2018, setting yet another record. The production in December was 1,401,385 bopd (preliminary).

At the end of 2017, production was 1,182,836 ave bopd (final). In one year, that is an increase of 218,549 bopd, or a whopping 18.5%.

Statewide and Bakken shale production has been trending up sharply.  The rapid rise since last winter’s lull is clear.

For a longer term perspective, check out the average daily production since 1990:

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The work effort driving the record levels of oil production in North Dakota.

Previous post showed a graph of the new records of oil production in North Dakota in recent months.

Let’s look at the drilling and completion work driving the rising levels of production.

Keep in mind that the drastic improvements in productivity has decoupled the number of drilling rigs from the number of wells drilled.

Also keep in mind the ‘fracklog’, or the number of wells in the backlog of wells that have been drilled but not yet completed. In essence, wells are drilled and then left in inventory. When the expectations of prices are right and there are completion crews available, production companies can quickly complete a well and get it into production.

The number of drilling rigs in the field dropped dramatically during 2015. Since the fall of 2016, the count has slowly risen, with a noticeable pickup in the last five months:

The number of wells awaiting completion, the ‘fracklog’, has been increasing slightly over the last year but dropped over the last two months:

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Oil production in May 2018 for North Dakota hits new record level

Multiple pumpjacks on a well pad is a normal thing in North Dakota. Photo by James Ulvog.

In May the crude oil production in the state hit an average of 1,244,629 barrels of oil per day (bopd). As always, that is the preliminary tally, which will change a bit over the next two months as a few late reports arrive.

That is 15,057 bopd higher than the previous record of 1,229,572 bopd in December 2014.

Here is my graph of production state-wide and Bakken only (including Sanish, Three Forks, and Bakken/Three Forks levels):

For a longer term perspective, here is the total monthly production since 1990:

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Value of monthly oil production in North Dakota through April 2018

Fourteen wells are on that pad, which is on the south side of Williston near the Missouri River. Photo by James Ulvog.

Previously discussed the near-record level of oil production in the state during April. Here is the graph of average daily production since 2004:

What is the value of that oil? Multiply those average daily production levels by days in the month and then multiply by the following average sweet crude prices in the state:

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Oil production for April 2018 in North Dakota getting close to record level

There is space for more than 6 pumps on that site. Might be as many as a dozen when fully drilled. Photo by James Ulvog.

In April crude oil production in the state hit an average of 1,224,948 barrels of oil per day (bopd). That is the preliminary tally, which will change a bit in the next report as a few late reports arrive.

That is really close to the record high of an average 1,229,572 bopd in December 2014. Another 4,624 per day would get the state to a new record. That could be achieved for April by late reports from the field. Or, since production increased 42,112 bopd since December, the May data will likely break the record.

Here is my graph of production state-wide and Bakken only (including Sanish, Three Forks, and Bakken/Three Forks levels):

For more background, here is the total monthly production since 2004:

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Oil production in North Dakota increases 1.0% in November 2017; getting close to record output

Production of crude oil increased 12,110 bopd in November, or 1.02%, going from 1,182,810 (revised October) to 1,194,920 (preliminary November).

The record high production was 1,227,529 average bopd in December 2014. Production in November 2017 is 32,609 bopd below the high in December 2014. It will only take another 2.7% increase in average production to clear the previous record. I’ll guess that will happen in December 2017 or January 2018, before the winter start to cut into production. (That is not a very bold prediction since Mr. Helms thinks the record production level will easily be surpassed regularly in later 2018.)

Above is a graph of average production in the state since 2004.

Check out the following graph for production from only Bakken formations and total for the state since 2008:

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