Update: Greetings to readers arriving from The Million Dollar Way! Enjoy! Oh, by the way MDW, you are verywelcome. For other readers, if you enjoy my writing on energy in general, Bakken in particular, and the wide open frontier of the energy revolution, somewhere around one-quarter of the credit for what I know goes to the learning provided by MDW.
I’ll make a guess we will be hearing lots more stories of hiring in Bakken. Some recent articles:
Two articles on oil companies hiring fracking crews
Scuttlebutt is staffing shortages to develop
Two articles on Target Logistics converting crew camp into hotel
12/29 – Grand Forks Herald at Dickinson press – Oil companies hiring fracking crews in Bakken – Job Service North Dakota said there are 60 companies wanting to staff up fracking crews. Each crew will need between 45 and 65 workers, so that something in the range of 300 or 350 jobs in the new year.
It takes about two or three days to frack a well. Assume two wells per crew per week. That would be 12 wells a week for 6 crews, or somewhere around 48 wells in a four-week month. Keep in mind that’s on top of whatever fracking crews are in the field now.
Above graph shows the average daily production in North Dakota statewide and in the Bakken field. Output in November dropped to 1,033,693 bopd from October production of 1,043,318 (revised), a change of 9,625, or down 0.92%.
Previous post described a well pad southwest of Williston that holds 14 working wells. These are referred to as the Atlanta wells.
I got some great pictures of the site from the air and from the ground on my recent trip to Williston. Million Dollar Way just updated the production information for the 14 wells. So, decided to bring all that info together.
If you want to find this mega-producer, the address is 4750 141st Ave. NW, Williston. If you want to drive there, be advised the road off the 85 shown on Google maps isn’t there anymore. You will need to take a nearby side street. Coordinates are 48.109623, -103.729930 if you want to look them up on Google maps. The pad is north of the Missouri River and west of the US 85 bridge over the river.
The Million Dollar Way has been following these wells for several years. Check out this post for background and production data:
There is one site southwest of Williston that holds 14 working wells. They are referred to as the Atlanta wells. Check out the photo above and following.
If you want to find these things, the address is 4750 141st Ave. NW, Williston. Coordinates are 48.109623, -103.729930 if you want to look them up on Google maps. It is immediately to the north of the Missouri River close to the bridge on U.S. 85 crossing the river.
On my trip to Williston over Thanksgiving 2016 I was able to take some aerial pictures since I flew in on United flight from Denver, meaning we flew in to Williston from the south. I was also able to drive out to the site and take pictures from a public road immediately north of the site.
Outlook for energy production in the US is getting better and better. Might want to get out your sunglasses.
Low oil prices have spurred innovation amongst US drillers; file this under unintended consequences for OPEC.
Breakeven prices in US shale approaching that of OPEC producers; ponder that the breakeven price for Saudi Aramco is not the same as breakeven price for the Saudi government.
Overview of news in 2016 for oil & gas; good news for companies that survived the year.
12/2 – Tyler Morning Telegraph – Saudis awakened a sleeping giant when they declared war on fracking– Editorial says the Saudis made a serious mistake waking up the slumbering giant of fracking land. The artificially high prices allowed the frackers to get started. The artificially low prices forced them to innovate, cut costs, and start producing at breakeven points competitive to the OPEC giants. Not a good move.
Wouldn’t it be grand if that paragraph was the four-sentence history of fracking?
Production costs are half what they were two years ago.
Value of monthly oil production, calculated by multiplying the rate cited in The Director’s Cut for average wellhead price in the state multiplied by average daily production. Amounts are in billions of dollars.
Average daily price in the state. This feeds the previous graph. Notice the substantial up tick in the last several months.
Production saw a big increase in October. Output climbed from 971,760 in September (final) to 1,043,207 (preliminary). That is a 7% jump, moving production across the 1M point. That is a big increase. Why? Then some comparisons, then a couple of graphs.
Lynn Helms attributes the increase to operators opening up wells that had been throttled back and a few big wells coming on line, according a quote in the Wall Street Journal, North Dakota Crude Oil Output Rises to a Five-Month High. Yeah, the WSJ quoted Mr. Helms. They ran an article the day of his press conference to discuss the monthly report. How ‘bout that?
That is an increase of 71,447 bopd, the largest increase in one month going all the way back to 1989. Other months with increases of 40K bopd or more were:
54,065 – September 2014
52,099 – June 2014
50,845 – July 2013
42,653 – February 2013
That is an increase of 7.35%. Going back to 1989, the only months with a higher increases on a percentage basis were:
Each Bakken well now expected to produce a million or 1.5 million barrels of oil
9/27 – Williston Herald at Dickinson Press – Two Williston hotels closing their doors – An owner of two hotels with total of 105 rooms will be closing them this week. Both are on the market, for $3.0M and $3.2M. One of them reportedly had drugs sales and prostitution on site during the boom.
Don’t worry too much about capacity. There’s a huge number of hotels open in Williston, especially compared to three or four years ago. Also, those hotels won’t be going anywhere. When the drilling picks up, someone else can pick up those empty hotels for a real bargain. When the space is needed, they will be open.
10/10 – Amy Dalrymple at Oil Patch Dispatch – Williston Breaks Ground on New $240 Million Airport – Construction is underway for the new airport. It will have a 7,500 foot runway and four gates at the terminal. The new airport will be able to handle planes that can hold 165 passengers instead of the 50 passenger jets in use at the current airport.
Currently there are five daily flights into Williston, which is down from 11 at the busiest time of the boom.
Estimated Ultimate Recovery, EUR, is the amount of oil to be drawn from the well, I believe with only primary recovery. A few years ago (2011), the typical EURs were 550K barrels from middle Bakken and 450K from Three Forks bench. Continue reading “Random updates from Bakken”
First article below says that predicting oil prices is a fool’s errand. The payoff of trying to do so, it seems to me, is it requires diving into the dynamics and trying to understand the production and demand aspects underlying the price of oil. Second article below delves into the dynamics.
Mr. Oksol agrees with the major points: OPEC’s effort (meaning Saudi Arabia) to shut down shale producers has been unsuccessful. They tried this once before back in the 1980s.
On the second point, he agrees shale producers will respond fast to any rise in prices.
Author agrees that the phrase “big bet” is an acceptable way to describe the Saudi strategy to take out shale producers but thinks a more accurate description would be “trillion dollar mistake.” As for me, either description works well.
Previous post showed the oil production in North Dakota through August 2016. Here is some more info on production in the state. Data is extracted from the monthly “Director’s Report” and historical production data.
Average sweet crude prices for North Dakota oil. This reflects a discount from the West Texas Intermediate due to transportation costs.
Here is the value of monthly production based on actual output multiplied by the average sweet crude price rolled into the preceding graph:
In contrast to the horrible news mentioned yesterday from Venezuela, consider the the amazing news from the open frontier of energy production. The benefits produced by fracking just don’t seem to stop.
The city decided to approve a new set of rules to shut down all the crew camps. The operators are fighting back. Lots of news in the last few weeks with the September 1 deadline having arrived. Mayor proves in his public comments that he is engaged in protectionism, favoring two classes of housing providers over one other.
8/23 – Williston Herald – Commission is unanimous: Crew camps end Sept. 1– With the second reading, the law becomes official that crew camps within the reach of the Williston Commission must close by September 1, the buildings removed by May 2018, with the land reclaimed by August 2018.
Total crude oil production in the state dropped 20,419 bopd, going from 1,047,003 bopd in May to 1,026,584 bopd in June. That is a decline of 1.95%. I’ll make a guess that another month or two will see production cross the one million point.
The Director’s Cut is guessing the low prices, and consequent low rig count, will last through third quarter this year or second quarter of next year.
He has discussed this pad before. See his post for links.
Mr. Oksol links to a photo of the site taken by Vern Whitten: Vern Whitten Fall Portfolio. Since I try really hard to avoid copyright violations, you won’t see his photo on this blog. Instead you can see Mr. Whitten’s photo at this link. It is photo 28 of 39.