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.
An update on the number of drilling rigs in the state and several posts on Bruce Oksol’s current visit to Williston.
Here is a recap of the North Dakota rig count, all from Million Dollar Way. Some older data repeated for recent context: Continue reading “General update on Williston and Bakken – 9/10”
Yet one more illustration of why regulatory agencies need to be fully staffed – employers who rip off their employees…
A person who owns 15 hotels in North Dakota agreed to settle a federal lawsuit claiming he cheated at least 192 employees out of overtime pay and didn’t pay some of them a minimum wage. He apparently is not hurting for money since he paid up $122,871 in back wages and $61,436 in penalties a mere four days after the judgment was issued.
Continue reading “The dark side of life…wage theft…nuclear proliferation”
A few of many articles on drones that caught my eye: precision of military drone strikes and possible weaponization of drones by law enforcement in North Dakota.
The second and third articles I’ll mention have a visible bias and agenda. Do I also have multiple biases and agendas?
You better believe I do. Read any five consecutive blog posts and you will quickly see my point of view.
The difference between those articles and this blog is that I’m not pretending to be objective.
8/27 – Wall Street Journal – Hacker Killed by Drone Was ‘Secret Weapon’ – This cyberwar stuff is going kinetic.
A few articles on what’s going on in Bakken: tougher trafficking laws in effect, Williston Walmart no longer open 24 hours a day, $18 billion in state reserves, and new Williston airport moving forward.
7/8 – Bismarck Tribune – County okays windfarm near Tioga on a split vote – Landowners organized an effort to develop a wind farm which was bought by a commercial company. That effort has now led to a 75 turbine project that has been approved by County commissioners.
Each month after the statistics are released for North Dakota oil production, I run a few graphs showing the story of what is going on there.
Here are a few more for May 2015.
Average number of producing wells by year. This is the number of producing wells in the statistics, here and here, with my calculation of the average of the monthly amounts. You can see a breakout in 2010 and 2011. The huge increases are in ’12, 13, and ’14. Even with the slump in prices, which led to a drastic drop in the number of drilling rigs, the average number rigs in ’15 has increased more than any year prior to ’12. Continue reading “A few more tidbits on rising oil production in North Dakota – 5/15”
Prof. Mark Perry pulled together some estimates on the economics of a Bakken well in North Dakota in his post Top ten things I learned on my summer trip to the Bakken oil fields, Part II. Previously discussed Part I and Part II.
Here was his data:
Average cost to drill, frack and complete a Bakken oil well: $9 million
Expected production life of a Bakken oil well: 45 years
Lifetime oil production per well: 615,000 barrels
Expected lifetime revenue generated per well: $46.125 million at $75 per barrel
Total operating expenses per well: $2.3 million
Royalty payments to mineral owners per well over 45 years: $7.3 million
Taxes Paid per well: $4.325 million total ($2.1 million gross production taxes, $1.8 million extraction tax and $425,000 in sales taxes)
Total employee salaries and wages per well: $2.125 million
Average Profits Generated per Bakken well: $20 million net of costs and taxes
Let me rework those numbers –
This is a really rough guess of what the lifetime income statement might look like for one well: Continue reading “What do the economics of one Bakken well look like?”
Prof. Mark Perry provides his first report on the few days he was able to spend in Williston at the end of May. From Carpe Diem on June 16: Top ten things I learned on my summer trip to the Bakken oil fields, Part I
I was there for a few days last month also. I however, did not get a two-day personal tour of Continental’s drilling sites. What a blessing for him!
If you need a primer on Bakken, I heartily recommend his post.
Here are the first five of his points with my comments:
Continue reading “Great things to learn about Bakken – part 1”
A few thoughts on the upside of oil production in North Dakota.
6/14 – Million Dollar Way – A Long Rambling Note on a Bunch of Things Regarding the Bakken – If you are still wondering why I am so powerfully positive on the Bakken, check out Mr. Oksol’s post.
My overly compressed summary:
Continue reading “Guess on how long Bakken oil will be pumped”
(Poorly focused photo by James Ulvog. Workover rig, one pumpjack ready to go, and three not yet complete. Gonna’ be lots of wells on that pad.)
Big drop in tax on produced oil in North Dakota won’t happen. Also a recap of the tax rates on oil.
5/29 – Associated Press at Bakken.com – Oil price increase means North Dakota tax trigger won’t hit – If crude oil prices are below a certain threshold, currently $55.09 for five consecutive months there would be a dramatic reduction in the tax on oil produced in the state.
Prices have been running below that cut off for January through April. During May the key index has been above the cutoff.
Continue reading “North Dakota’s “big trigger” tax reduction not going to get pulled”
Here’s a few quick notes on interesting news from the North Dakota oil fields:
Rig counts actually going up –
5/20 – Million Dollar Way – Another Post-Boom Low — 80 Active Rigs; Eleven (11) New Permits; Slawson Proposing A 11-Well Pad In Big Bend Oil Field – 80 rigs
5/22 – Million Dollar Way – Eleven (11) New Permits – Count of rigs is up to 82.
5/26 – Million Dollar Way – Five (5) New Permits – Rig count up to 84.
I wonder if the drilling is now in a plateau. A few more articles on point:
A few articles on what’s going on the Bakken oil patch. Williston keeps growing. Rig count falling. Neither a surprise.
3/16 – BakkenShale.com – Population Grows 20% in Williston – Researcher Nancy Hodur of NDSU has done a tally of the total number of people in Williston and Williams County. She started with the census numbers and added hotels, man camps, and RV parks. Her estimate:
4/3 – Reuters Media at Dickinson Press – Clock keeps ticking toward North Dakota oil tax break – Continue reading “More good stuff on Bakken – 4/14”
Here’s a few quick notes on interesting news from the northern side of Cowboyistan:
3/19 – Reuters Media at Dickinson Press – Some come late to the oil party: Companies more selective after low prices slows boom – Article tells story of a guy and gal who drove to Williston.
Arrived with no skills, no money, no housing, and no job.
Continue reading “More good stuff on the Bakken – two perspectives on the local economy – 3/24”
Petroleum Industry’s Economic Contribution to North Dakota in 2013 is the current update to a bi-annual analysis of how much the oil and gas industry contributes to the state’s economy. You can find the report at the previous link or here. The research was conducted by Dean A. Bangsund and Nancy M. Hodur, profs at North Dakota State University.
The executive summary provides a great overview of the petroleum industry and the economic activity in the state. Worth reading for the overall background, a general intro to the energy industry, and what’s going on in Bakken.
I read most of the report. In addition to historical information on average cost to drill and complete a well which is summarized in the graph above, here are some of the highlights that caught my eye:
(Photo by James Ulvog.)
A variety of articles suggest that even with the drop in crude prices and rigs being stacked, the economic opportunities are better in North Dakota than elsewhere. Also, drug busts as an indication why residents are justifiably concerned about the growth in recent years.
3-13 – Wall Street Journal –
Crude-Oil Price Collapse Takes Toll on Williston /
North Dakota town was a magnet for job seekers, but now work is scarce
Headline covered the e n t i r e w i d t h of page B1 above the fold.
Oh, woe is me! The economy in Williston has utterly collapsed! The bust is here and Williston is a ghost town!
Or, maybe not. Your conclusion depends on whether you read the headline or the article.
Multiple comments I’ve seen by Million Dollar Way and others, including Mr. Lynn Helms, indicate that drillers in North Dakota are holding off on completing their wells.
This is for two reasons. First, to conserve cash since completion is a huge portion of the total cost. Second, to wait for a price recovery before opening up the surge in production in the first year and especially first few months of a new well’s life.
Here are some graphs that help me understand what is going on.
Here is the rig count:
Quite a rapid drop in the last few months.
Drillers are stacking their rigs quickly, as expected. Keep in mind that hasn’t had a dramatic impact on production yet.
The 111 number in mid-March is below the estimated count of 115 that Mr. Helms thinks is needed to maintain production levels at 1.2M bopd.
Here is the amazing part. Look at the estimated number of wells waiting for completion:
Wow. The count was on a plateau for most of 2011. That runup in late 2011 corresponds to a big increase in rig count. Also corresponds to increased use of pad drilling, as pointed out by Million Dollar Way. That means multiple wells are drilled on one site with completion of all the wells waiting until all the others are drilled. So it makes sense the backlog would increase.
Look what’s happened since the fall. Here are the numbers:
That is a 125 jump in November, 25 drop in December, and 75 runup in January. Up about 200 in 3 months. Drillers are banking those wells waiting for price to go up.
When prices recover, there will be a rush to complete which will generate a big jump in production. May take many months for them to all come on-line, but there will be a surge.
Previous posts on January production data: