Multi-well pad being drilled in Williston. Photo by James Ulvog.
Yesterday’s post on multi-well pad drilling saw lots of visitors from The Million Dollar Way. Bruce Oksol linked to the post in his discussion, Multi-Well Pad Drilling In The Bakken.
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.
View from the highway that caught my interest. That is a lot of wells. Photo by James Ulvog.
One of many ways energy wizards are driving down the cost of drilling for oil is putting multiple wells on one site.
7/4 – Amy Dalrymple at Dickinson Press – Bakken multi-well pads getting bigger– The technique of drilling several wells from one site, called multi-padmulti-wellpad drilling, is increasing. Both the number of pads and the number of wells per pad is going up.
For several years now I have noticed multiple pump jacks on one site.
In September 2015, I saw a 15 well pad. It is a few miles west of Ross and about a mile and a half north of highway 2. You can see it on Google maps at coordinates 48.333785, -102.653962, although the satellite photo is really old. It shows only the middle six wells with pumps installed and a drilling rig working on the west row of wells. No progress on the east row of wells.
Crew camp on north side of Williston that the city wants to shut down. Photo by James Ulvog.
Looks like the Williston City Commission is in deeper trouble on the crew camp issue.
Judge Hovland issued a preliminary injunction against the city’s rule to close all the man camps because he found it likely the city violated its own rules in passing the ordinance. Specifically, it is likely the ordinance should have received a super-majority vote of 4-1 under the city’s own rules.
Now, writer Rob Port has received a written opinion from the state Attorney General that the city commissioners violated the state open meeting law in their efforts to find a way to shut down the camps.
Update 7-19-16: for future reference, his inmate number is 13523-059. His middle initial is A, for Alexander. Age 40 as of summer 2016.
Update 10-23-18: Mr. Graves is still at Victorville Medium I FCI with an unchanged release date of 12/24/2043. Just 25 years and a couple months to go. His current age is 42, which means he will be 67 years old on his scheduled release date.
I’m not quite sure I understand why he would be at a medium security prison. I obviously don’t understand these things, but seems to me that a drug distribution conviction and five trafficking convictions would land him in a higher security facility.
Some graphs to show the value of oil produced in North Dakota.
First, the value of production by year from 2010 through December 2015.
To show the impact of volume, next is a graph of the volume of production for the year from 2003 through 2015.
Finally, to see the impact of drop in prices is a graph of the value of monthly production from January 2010 through February 2016. Based on information through mid-April, February was the low point in oil prices. There has been an uptrend since then.
Horizontal drilling and hydraulic fracturing has turned the energy world upside down. The massive transition isn’t over. A few articles on resilience of the industry.
Oh, and a university report showing no ground water contamination from fracking will be kept from public view. Why? Actual research results contradict the researcher’s stated agenda.
How much new housing will Williston need in the next few years? None? Some? A lot? Photo by James Ulvog.
A recurring human foible I see is making an assumption that the immediate past trends will continue in a straight line forever.
In the context of crude oil in general and western North Dakota in particular, the question is whether the slump of the last year will continue for an indefinite period of time (measured in years or even decades) or will there be surges in production at various points?
City officials in Williston give every indication of thinking that the boom is over and will never return. Seems like they are preparing for life in the city and surrounding area to have current level of employment plus only slow growth for decades.
I think that reasoning is why there is opposition from public officials to expanding the airport. Why spend any money on a new airport when you don’t need the extra capacity this afternoon and for the rest of the week? There is no reason to go through all the effort of tearing up farmland when the current airport is sufficient for traffic this month. There are open seats on flight to Minneapolis. Why, I’ll bet the airlines could even add a flight or two if they actually get more customers.
Why not chase all the crew camp facilities out of town? They are not needed. There is enough capacity in apartments and hotels to absorb the number of people who are in crew camps this month, so what purpose is there for ever again having any crew camp capacity in the city? Just force the temporary workers who don’t know how long they will be in the area to sign a one-year lease and everything will be fine. In the alternative, they can just stay in hotel that will only cost $3,000 or $3,500 or more per month. Problem solved.
If you assume that oil prices will stay where they are today for the next several decades and if you assume the number of rigs in North Dakota will stay in the range of 20 or 30 or 40 for a decade or two then you should plan for a city with population at about the current level.
If you assume the trends of the last 12 months will continue for decades, then there is no need for new facilities.
Rounding out the picture of North Dakota oil production based on data released by the state on April 15, 2016, here is a graph of the sweet crude prices in North Dakota from January 2010 through April 2016. Quite visible is the dramatic drop in late 2014. Of particular note is prices have recovered in the last two months.
Next is a graph of the rig count by month. You can also see a dramatic drop starting the end of 2014.
Finally is a graph of the fracklog from January 2012 through February 2016. This is the number of wells that have been drilled yet are uncompleted (DUC) meaning the well is drilled to total depth but the fracking has not yet been done. Basically this is a half million barrels of oil put on the inventory shelf until prices recover. That represents nearly a thousand wells than can be brought on-line rather quickly.
Average daily production dropped to 1,118,333 bopd (Prelim) in February from 1,122,462 (revised +352 bopd) in January. That is a mere 4,129 bopd decline, or 0.37%.
Here are a few graphs to paint the story. First average monthly production from 2008 through February 2016 showing total for the state and Bakken field only. Included in that graph is a pro forma of what production would have been (based on my wild guess) if the production increased after the winter at the average rate of increase over the preceding 24 months.
Second graph is average production in the state since 1990. Finally, to show the change since 2010 more dramatically is a graph of production since 2004.
Here is a recap of the North Dakota rig count, all from Million Dollar Way. Also, an article quantifying the impact on employment from the drop in rig count.
6 wells just about ready to start producing. Photo by James Ulvog.
The increase in DUCs, or drilled but uncompleted wells, in North Dakota is getting to be old news. The new word of fracklog has emerged to describe and quantify the number of wells waiting to be fracked before they go into production. Two recent articles and then a graph of the fracklog.
Big headlines recently announced two companies have stopped fracking. This is neither a big story nor a new story.
Previously mentioned the following article which says Whiting Petroleum will stop fracking its wells in the second quarter. This means they will keep drilling but not frack & complete any wells.
The city of Williston has voted down a compromise plan that would have allowed man camps to continue within the city and the one-mile reach beyond city limits. Unfortunately, this issue illustrates one dark side of capitalism: the tendency towards cronyism, or insisting the government intervene to protect you from competition or demanding that the government give you special favors.
3/3 – Williston Herald reprinted at Dickinson Press – Big oil makes big push for crew camps compromise– An alliance of 31 energy companies are suggesting a compromise to city of Williston as an alternative to shutting down all crew camps.
Suggestion is to cut beds 25% in each of the next two years and double the per-bed ‘fee’ to $800.
In December 2015, crude oil production in North Dakota dropped from a slightly revised 1,181,786 bopd in November to 1,152,280 bopd in December, for a 2.50% decline.
Completed well count was 76, which is a substantial drop from the 119 to 123 range in July through September. From August 2011 through December 2014 there were anywhere from 180 up to 213 rigs running. During that time, the average rig count was 192, by my calculations.
Fracklog is 945 at the end of December, which is a drop from the count during August through November but is higher than any month before that. This is the estimated tally of wells that have been drilled to total depth but have not yet been fracked & completed. As a result these are wells essentially held in inventory pending a price increase of oil.
The February Director’s Cut report indicated oil prices continue to drop, hitting $16.50 a barrel, yes under 17 bucks in February. The director’s expectation is for low oil prices to continue through the third quarter of 2016 with further drop in number of rigs in operation.
As you would expect with the dramatic drop in prices, exploration & production companies are cutting back operations. Today’s news making that point:
I’ve been going through a backlog of energy articles that I haven’t had opportunity to comment on before. A great article last fall from The Million Dollar Way prompted me to look at what has happened to oil output since prices collapsed.
10/14/15 – The Million Dollar Way – Wednesday, October 14, 2015 – Part IV; Blue Skies –Article is from October. The underlying point stands. Look how little the monthly output has changed even though drilling activity has shrunk.
Here are some stats mentioned for October 15 with prior year numbers:
67 current – 190 year ago – working drilling rigs.
About 1000 DUCs currently (Drilled and UnCompleted, meaning awaiting fracking) – a year ago the concept did not exist – this is the number of wells that have been drilled but have not been fracked. As soon as prices rise a bit, these wells can be completed and start producing in short order. Sort of like unassembled inventory on the shelf, just waiting for a worthwhile price to assemble everything to get it on the market.
Currently producers are choking back initial output to spread it over a longer period of time while a year ago production was wide open as fast as you can go.
About 150 now – 300 a year ago – new oil permits per month.
