Outrun Change

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…

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…

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…

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…

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:

Read more…