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.
If you could make an investment in a productive asset that would have a gross return just under four times your initial amount in 12 months, would you care how quickly the investment fell apart after that?
Let me be more specific. If you could invest $8M in an oil well that produced $30.7M of oil in the first 12 months of production, would you care how fast the production dropped after that? Would you care if the well had that horrid Bakken decline rate?
Here’s a few quick notes on interesting news that I won’t cover in a separate post: trucker caught dumping saltwater, new regs for filter socks.
4/9 – Million Dollar Way – The North American Shale Revolution is “For Real”; Won’t Easily Be Duplicated Elsewhere – Continue reading “More good stuff on the Bakken – dumping, new rules for filter socks – 4-24”
Here is an updated graph of monthly production in the state, for the Bakken fields and whole state.
Can you pick out the winter months just by looking at the graph?
There were 18 days in February with temps 5 degrees lower than the usual frigid, 4 days with high wind that stopped completions, and production stopped on over a hundred wells because a gas processing plant was off-line for upgrades. With all that, production grew 16,224 bopd to 951,350 bopd.
That is off the high of 973,280 in November.
For more info, check out Amy Dalrymple’s report: Helms says curtailing oil production necessary to reduce flaring. Additional news there is planned rules for the state will place a limit on flaring, which will slightly hold back production.
Forecast from Wood Mackenzie, as announced in Oil & Gas Financial Journal: Bakken Drilling and Completion Capex to Top $15B in 2014.
Their predictions:
Highest 30 day Initial Production rates are above 1,000 bopd in the Nesson Anticline.
EURs are highest in the Fort Berthold subplay at 700,000 barrels.
Peak what?
A few years ago, I would have had a 500 word post on each of the following articles from Million Dollar Way. Now I’m to the point where I get the knowledge quicker and only want to summarize in a few sentences. The news in these two posts is huge: First, the horrid Bakken decline rate might not be as big a deal as previously thought. Second, the drilling rate of 2,500 new wells a year is probably sustainable.
Wow.
The declining relevance of the decline rate
3/31 – Million Dollar Way – Decline Rate And The Bakken – Continue reading “More good stuff on the Bakken – decline rate and sustained drilling – 4-8-14”
Here’s a few quick notes on interesting news that I won’t cover in a separate post.
3/25 – Alberta Oil Magazine – Here We Go Again – The second wave of the horizontal revolution is on its way – Continue reading “More good stuff on the Bakken – 4-3-14”
Million Dollar Way has a complex post describing the increasing density of wells on each portion of land being drilled in North Dakota. Think 14 or 28 wells on 4 square miles. I’ll try to pull a few key ideas out of An Example of “Ears Pinned Back” — As CLR Calls It – In The Bakken.
Density in 2007
In ancient days, say about 2007, the concept was one well on a section. That according to the article.
Density in 2011
The change in oil production in the last few years is astounding. For perspective, look at the following two charts by Prof. Mark Perry, from his Carpe Diem blog. Both graphs used with permission:
Oil production in Texas:
From The remarkable rise of Texas crude oil: The state produced nearly one billion barrels last year, and 34.5% of all US crude. Just under a billion barrels. That’s around a third of US production.
Oil production in North Dakota took off in 2008: Continue reading “The shale revolution. Or, what Peak Oil? #33”
I often seen a news article related to the topics discussed on my blogs but the article doesn’t warrant a full post. Or, I don’t have time to develop a full discussion. Those articles are described briefly in “more good stuff” discussions.
Here’s a few quick notes on interesting news that I won’t cover in a separate post: housing prices, pad drilling, and improper disposal of radioactive filters.
Amazing things going on around us. Here is my latest list of a few articles about energy that help me make sense of the radical change taking place. Tomorrow, tidbits of the other newly open frontiers.
Energy
1-6 – CNS News – Saudi Billionaire Prince: Fracking Competitively Threatens ‘Any Oil Producing Country in the World’ – Prince Alwaleed Bin Talal is pushing the Saudi government to diversify the country’s economy. Currently 92% of government revenue is derived from oil, he says. The rapid expansion in output caused by combining horizontal drilling with staged hydraulic fracturing presents a serious threat to any country that is reliant on oil. Big news. Bigger issue.
A delightful “problem” to have – 1-7 – Bismarck Tribune from the New York Times – Oil glut stirs up political brew – The surging production of crude is opening a discussion of whether to allow more exports of crude. Seems we have so much unrefined light, sweet crude we don’t know what to do with it all. As a result, the politicians are getting involved. I wish we as a country and planet had another half-dozen “problems” like this.
(By the way, what Peak Oil?)
More downside to the Bakken boom – 1-10 – The Dickinson Press – Criminal defendants in fed court up 31 percent in western N.D. in 2013 – Continue reading “More good stuff on the open frontiers, energy edition – 1-16-14”
Bloomberg – North America to Drown in Oil as Mexico Ends Monopoly
Potentially another game changer for world-wide energy – – the Mexican legislature has changed national law to allow foreign investors to own oil reserves. This will draw the major oil companies with their talent, equipment, funding, and infrastructure. Speculation is oil production from Mexico could double in a decade.
Still some major obstacles, but the potential is huge. The Mexican government and her people could benefit tremendously. I really hope they handle this well, for their good and the good of everyone who uses energy.
Newsday – Remember the energy crisis? Fracking fixed it.
Notice that the constant stories of the “energy crisis” isn’t in the news anymore. If you were around in the ‘70s you remember long lines to buy gas on your assigned even or odd day. Crisis stories continued for years, through the entire Carter administration and beyond.
Lots of production companies around Bakken are going to expand hiring in ’14. Bismarck Tribune reports Oil service companies on hiring blitz.
The rapidly increasing number of wells is creating permanent jobs to service the wells. Each well requires attention. I’ve read elsewhere that each well creates the need for one full-time position. That would be about 8,000 permanent jobs for the existing wells, with 2,000 new positions a year.
Two key comments, for me at least: Continue reading “Hiring in North Dakota to pick up – “blitz” in ‘14”
Naturally occurring shallow methane exists all across North Dakota. Methane in water wells has been a known condition for 100 years.
I don’t think fracking has anything to do with shallow methane 200 or 300 miles away. I seriously doubt fracking caused methane to seep into wells 80 years before fracking was used.
A video with over 400,000 views shows a guy lighting tap water on fire. Creator asserts he works in the North Dakota oil fields, which leaves you with the implication the methane in the water is caused by fracking. The commenters on the video quickly reach that scientific conclusion based on an unverified 54 second video from an undisclosed location.
Here’s the poorly known issue.
A major part of the efficiencies well drilling in Bakken is putting multiple wells on one site. This saves a huge amount of time to set up and take down the rigs. Instead of disassembling/ transporting/ re-assembling, the still-assembled rig side-steps a few feet and the crew resumes drilling.
Continue reading “Multiple wells on one site – Pad drilling”
Production in the state increased to 941,843 barrels of oil per day in October from a slightly revised 933,191 bopd in September.
The Director’s Cut report says bad weather is the reason for a small increase in production: Continue reading “North Dakota oil production increases just under 1% in 10-13”