oil production – Page 11

More good stuff from the open frontier of energy – 6/1

Articles on operation of salt water disposal sites, damage from ethanol, drones in the oil patch, and an interview with Chevron’s CEO (including comments on harsh over regulation in California).

5/26 – Journal Publishing – Putting the ‘safe’ in hazardous oil waste – Superb article on salt water disposal (SWD). Waste water from a well, perhaps two or 3 gallons for every gallon of oil, goes to special treatment sites.

The SWD sites have lots of tanks to let the saltwater settle. Oil floats to the top, is skimmed off, then sold.

Continue reading “More good stuff from the open frontier of energy – 6/1”

North Dakota’s “big trigger” tax reduction not going to get pulled

(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”

More on the revolution in energy, specifically shale oil

It is astounding to watch what is happening in the energy arena. U.S. petroprenuers have kicked off an energy revolution.

The staggering idea is this whole shale thing could just be getting started. Consider the following:

5/26 – Mark Perry at Investors Business Daily – Saudis’ Drive to Kill U.S. Shale Has Backfired – Prof. Perry points out the Saudis have now acknowledged their goal was to take out shale production. They think they have substantially succeeded based on the drop in recount.

I think the conceptual error is to assume there is a direct correlation between rig count and production. There are so many fallacies in that concept.

The ironic thing is there is a huge fracklog of wells drilled but are awaiting completion. As soon as prices come up a bit (exact point we may soon find out) there are a lot of wells for which it will be economic to finish. In North Dakota there are around 800 wells that just need to be fracked and they can come on the market. For context that’s just under half a years worth of new drilling.

One of the highly unintended consequences is to accelerate efficiencies and technological innovation. The article calls attention to those factors.

Continue reading “More on the revolution in energy, specifically shale oil”

March oil production in North Dakota increases 12K bopd

The preliminary March production info is in – average daily production increased to 1,190,538 bopd from a very slightly revised 1,170,082 bopd in February. That increase of 12,501 bopd essentially offsets the decrease of 13,116 bopd in February.

Here is a graph of current production on a long-term perspective:

The peak in December 2014 was 1,227,529 bopd. March 2015 production is a drop of 36,946 bopd.

Last few months look kinda’ sorta’ like a plateau, doesn’t it?

Take a look at the following production graph. Do you suppose that is the change that OPEC wanted to see when they decided to maintain production in order to crush the American shale sector?

Continue reading “March oil production in North Dakota increases 12K bopd”

More good stuff from the wide open energy frontier – 5/8

Some articles on the amazing things going on in the energy world: oil factories, fracklog, greener fracking and calculating the Saudi cash burn rate.

5/6 – Russell Gold at Wall Street Journal – What the Future of Oil Drilling Will Look Like – think “oil factory”. Liberty resources is developing a 10,000 acre complex that will have 96 wells when complete. It will be called Stomping Horse.

A pipeline corridor will link all the drill sites to each other allowing oil and natural gas to be gathered to one location. Freshwater can be pumped from a central location and saltwater gathered by pipe at the disposal well.

Continue reading “More good stuff from the wide open energy frontier – 5/8”

North Dakota oil production drops 1.2% in February, or 14K barrels a day

Numbers are out for February 2014. Average production in February was 1,177,094, which is down 14,104 from the very slightly revised January amount.

Here is the production in graphs:

For a longer term perspective:

Using the average sweet price mentioned in the Director’s Cut, here is the value of monthly production.

Reason for the drop in value is the price per barrel:

That slight recovery in current month is good but not a lot of help. On the other hand, at least the price isn’t still falling.

More graphs for February production are here.

Rig count and wells waiting for completion in North Dakota – 4/14/15

For more depth behind the slowdown in production mentioned in the previous post and a hint of what is to come, consider the count of drilling rigs in the field and the backlog of drilled wells that need to be completed. After drilling, the wells need to be fracked and then they start producing.

The count of wells is dropping fast:

As you look at the graph of estimated number of wells waiting to be completed (i.e. fracked), keep in mind state regs only allow a site to sit for a year before it must be completed. Otherwise it has to be plugged. That means there will be a surge of wells getting completed late in 2015.

Speculation is that if the ‘big trigger’ is pulled, dropping the tax on production, the completion activity will take off fast. Continue reading “Rig count and wells waiting for completion in North Dakota – 4/14/15”

Crude production increase in 2014 is largest in 100 years. What Peak Oil – #38

The Energy Information Administration says the increase in crude oil production (counting lease condensate also) during 2014 was 1.2M bopd. That is the largest increase since 1900, when record keeping started. The percentage increase is 16.2%, which is the largest percentage increase since 1940.

Is the cratering of crude oil prices going to crater oil production as OPEC wants to make happen? Not quite.

EIA expects crude oil will increase by these amounts:

+8.1% – increase in 2015
+1.5% – increase in 2016

What Peak Oil?

Continue reading “Crude production increase in 2014 is largest in 100 years. What Peak Oil – #38”

Impact of oil and gas industry on North Dakota economy. General insights on energy in the state.

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:

Continue reading “Impact of oil and gas industry on North Dakota economy. General insights on energy in the state.”

More good stuff on the Bakken – 3/17

Here’s a few quick notes on interesting news that I won’t cover in a separate post. I’ll come back to the first article later this week.

3/15 – Bismarck Tribune – Oil adds $43 billion to economy, study say – Research by North Dakota State University profs calculate that oil and gas add $43B to the state’s economy. In 2013, they calculated the energy industry added 55,000 direct jobs and another 26,000 indirectly. Report is available here.

Continue reading “More good stuff on the Bakken – 3/17”

What energy will provide the power to keep our prosperous lives prosperous? Fossil fuels or wind & solar?

Entertaining contrast of two articles I saw on Friday. Each points to a different future. Which world view will make life better for more people all over the planet? Which energy source will provide prosperity for the most people?

Here’s a hint:

(From Carpe Diem. Used with permission.)

3/13 – Matt Ridley at Wall Street Journal – Fossil Fuels Will Save the World (Really) / There are problems with oil, gas and coal, but their benefits for people—and the planet—are beyond dispute

Article was feature on front page of the Review section on Saturday.

I will talk about this article a lot. In the meantime, here’s my paraphrase of just a few major points: Continue reading “What energy will provide the power to keep our prosperous lives prosperous? Fossil fuels or wind & solar?”

Value of oil production in North Dakota is plummeting

Dollar value of the crude oil produced in North Dakota each month is down from about $3B last summer to about $1.2B in January. That is a drop of about 61%.

I have accumulated the average monthly sweet crude price mentioned in the monthly Directors Cut and combined that with the total production for the month.

Here is what I calculated for the monthly value of production.

That is based on the monthly production in the previous post, combined with the average price shown here: Continue reading “Value of oil production in North Dakota is plummeting”

Oil output in North Dakota drops slightly in January.

Average daily output in North Dakota declined to 1,190,511 bopd, down 3.0% from the slightly revised December record high of 1,227,483. When I say slightly, I mean the December average was increased by 139 bopd, or one-hundredth of one percent.

That brings production down to just over the amount in November. January is the third highest average.

This month I graphed the monthly value of oil production. More on that tomorrow.

First, my two graphs on monthly production:

Next, a shorter time horizon with the Bakken-only data. Continue reading “Oil output in North Dakota drops slightly in January.”

More good stuff on the open frontier of energy – 3/12

Here are a few recent articles that help me understand what is happening in the open frontier of energy. Two articles on the damage from ethanol and a view of Cowboyistan. Also cool pictures of North Dakota.

3/10 – Robert Bryce at New York Times – End the Ethanol Rip-Off – In addition to the environmental damage from tearing up grasslands, harm to poor people world-wide, damage to small engines at 10%, and damage to most car engines at 15%, burning corn to power cars is wasteful economically.

Continue reading “More good stuff on the open frontier of energy – 3/12”

More good stuff on the open frontier of energy – 2/25

New frontiers are rough and tumble places. The energy revolution is proving to be no exception.

A few recent articles about crude oil and natural gas which I found interesting:

2/19 – Nature – Study finds relatively low emissions of methane from major US gas fields / After a series of alarming reports, scientists estimate leak rate of about 1% for three major US gas formations – Study by team from University of Colorado Boulder estimates that methane emissions in three major gas fields, (Haynesville, Fayetteville, and Marcellus) averages about 1% of gas that is produced. Range is from 0.18%-0.41% in Marcellus to 2.1% in Haynesville and 2.8% in Fayetteville. Average of 1% is in line with industry and EPA estimates and dramatically less than the 1.5% many critics claim.

2/9 – Wall Street Journal – Oil-Price rebound Predicted – Continue reading “More good stuff on the open frontier of energy – 2/25”