The visual appearance of a million barrel a day oil field

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(All photos by James Ulvog. Above view of 4 pads, with a pair of flares visible in the middle and workover rig on pad in lower left.)

Following post was written on October 18, when my wife and I flew out of Williston:

We took a 6:25 a.m. flight, so it was still dark. The view on departure was fabulous.

I wish I had the camera equipment (and the skill) to show what I saw.

Words will have to suffice, along with photos taken during daylight.

Sky was clear until several minutes from the airport, then clouds slowly built up.

Drilling rigs are quite visible, what with those tall metal superstructures and the working deck all lit up. Sorta’ like an all white Christmas tree.

Continue reading “The visual appearance of a million barrel a day oil field”

Peak Oil debunked over and over and over again – #37

The Wall Street Journal has a delightful editorial today on Peak Oil. That prompted me to pull together several articles I’ve been wanting to talk about.

Just in case you wondered, the devotees of Peak Oil are alive and well. Many of the big names are reportedly in hiding. Do a few minute search on the ‘net and you can still find a lot of them.  I’ve had a dialogue over the last few days with one gentleman on my blog.

Haven’t pointed out the foolishness of Peak Oil doctrine since July, so it’s time to look again. Here we go…

12/5 – Wall Street Journal – ‘Peak Oil’ Debunked, Again – And again. And again.

Gotta’ love the opening paragraph:

It has been 216 years since Thomas Malthus gave birth to the idea that mankind’s appetite for natural resources would outstrip nature’s capacity to supply them. There have since been regular warnings that the world is running out of soybeans, helium, chocolate, tunsgsten, you name it—and that population growth has become unsustainable. The warnings create a political or social panic for a while, only to be proved wrong.

Peak Oil is the current fad of ‘we will run out by the day after tomorrow.’

The run up in oil over the last several years to a high of around $112 this past summer has encouraged entreprenuers, or perhaps we should call them petroprenuers, to figure out how to get massive amount of shale oil out of the ground. Continue reading “Peak Oil debunked over and over and over again – #37”

About those dropping oil prices and OPEC’s decision to let them fall – 4

OPEC decided on November 27 to maintain production levels. That means they won’t try to increase crude oil prices.

One of the many articles I’ve read (don’t remember which one; too lazy to look for it) said the pricing decisions by OPEC are about geopolitics, not economics. Keep that in mind as you read headlines.

They have declared a price war.  As the old saying goes, be careful what you wish for.

By the way, even if OPEC can shut down a lot of the marginal producers, the oil not drilled will still be there, ready to be drilled as soon as prices rise.

Here is another bunch of articles on point.

11/28 – Wall Street Journal editorial – New Oil Order – OPEC decided on Thursday, 10/27 to maintain production. That will allow crude prices to stay where they are or even drop.

OPEC has lost a huge portion of its pricing power – that means they can’t force us consumers to pay whatever they want. This is a good thing.

OPEC knows that the booming US shale oil revolution will threaten their high prices and high volume. Thus,

Continue reading “About those dropping oil prices and OPEC’s decision to let them fall – 4”

Editorial hit piece on Bakken presented as front page reporting

The New York Times ran an entertaining hit piece on the entire Bakken oil field with particular focus on the intentionally lackadaisical enforcement effort from the state. I learned of the front page article from some complimentary twitter comments, from which I guessed this was a major attack before even reading the first paragraph.

Check out The Downside of the Boom.

As I’ve expanded the horizons of my reading over the last four years, I’ve learned how to see the slant on articles. It’s easy to pick up on agendas if you read carefully, watch the choice of words, and assess the point of view. The goal in this report from the NYT is oh so obvious.

Million Dollar Way’s read is the same:

It was clearly an editorial which will be used by movers and shakers in Washington to support their case that the environment is too important to leave it up to state regulators.

Having said that, I believe my point of view is just as visible – since I’m not a professional journalist, I don’t try to hide my worldview when writing about an issue on which I have an opinion. You may thus filter my comments and the NYT article as you wish.

On to the article…

At a simple level, the adjectives and adverbs are slanted. The oil service roads “slash” through the landscape. That description is in a caption for a photo showing a peaceful farm in the foreground, pump jacks on the hill at the horizon, and not a service road in sight. The farmer with those slashed wheat fields is likely depositing checks for twenty or fifty thousand dollars each month.

Leaks in pipelines which are under federal and not state supervision are the fault of the previously mentioned lackadaisical state regulators. Keep in mind a federal agency is responsible for most pipelines and all the big pipes.

Continue reading “Editorial hit piece on Bakken presented as front page reporting”

Crude price is still above the prices that generated the current boom

The Director’s Cut report from the NDIC Department of Mineral Resources, Oil and Gas Division has lots of good info every month.  I’ve been reading that for quite some time.

One piece of information included is the average sweet crude price. That is a usable benchmark for oil production. My understanding is there may be a discount for Bakken oil to allow for transport. The number in the reports are a reference point.

I accumulated the price mentioned in the reports going back to January 2010, which is the oldest report available online.

Current month Director’s Cut can be found here. Previous reports can be found here.

Here’s what I found:

11-14 crude price by month

Notice something?

Continue reading “Crude price is still above the prices that generated the current boom”

Another month of record production in North Dakota – up 4.6% for the month

 

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(Photo by James Ulvog)

Oil production in North Dakota increased to average of 1,184,635 bopd in September, up 4.63% from August. Bakken only production was 1,120,031 bopd average.

That is a 26.8% increase from 9/13 to 9/14. Very cool.

Flared percentage was down to 24% from 28% in August and 26% in July.

Here are some updated graphs:

Bakken and state-wide production since ’08:

9-14 since 08

More graphs –

Statewide since 2004: Continue reading “Another month of record production in North Dakota – up 4.6% for the month”

About those dropping oil prices – 3

A global game of chicken is underway. Will falling oil prices slow or shut down the rapid expansion in shale oil production in the US before the budgets of Saudi Arabia, Venezuela, and Russia are devastated? Which will happen first?

I think it isn’t a smart bet to go against the human ingenuity that has driven the shale revolution.

10/30 – American Interest – OPEC Makes Shaky Bet on Fragility of US Shale Boom – Article quotes a Bloomberg report which in turn quotes the OPEC Secretary General saying that 50% of tight oil (read shale in US) is uneconomical at current prices. That means he believes a lot of projects will get shut down at current pricing. AI article calls that a game of chicken. I agree.

11/3 – Wall Street Journal – Saudi Price Cut Upends Oil Market – Saudi Arabia dropped the price they are asking for crude oil shipped to the U.S. and increased their asking price for oil shipped to Asia.

A graph in the article helps explain why.

Continue reading “About those dropping oil prices – 3”

Concentration of Wells

Here are some more photos to show how dense the well sites are in the Bakken.

Following photos by James Ulvog taken from air in October 2014 when landing from the east into Williston.

Check out the number of pads in that short section of road. Probably less than one mile:

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Another batch of pads: Continue reading “Concentration of Wells”

About those dropping oil prices – 2

 

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(Photo by James Ulvog; five more reasons why gas prices are going down.)

This is second of several posts on the drop in oil prices. Not to worry – human ingenuity will kick in again as prices drop.

10/31 – Bakken.com – Fracking is saving Americans billions of dollars – The American Petroleum Institute estimates that without fracking, crude oil prices would be somewhere between $12 and $40 a barrel higher. That means Americans would otherwise be paying around $250 billion a year more in energy costs.

10/30 – Wall Street Journal – Energy Boom Can Withstand Steeper Oil-Price Drop – Some drillers in the U.S. will have trouble as prices drop and some locations may not be economical, but there are huge numbers of drillers who own huge numbers of sites that will be profitable at lower prices that we see today.

Check out the range at which drilling is still profitable; data from the article and a cool chart: Continue reading “About those dropping oil prices – 2”

Update on a short term production prediction

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(Photo by James Ulvog – 2 pump jacks in operation, 2 more being assembled, 1 workover rig, 1 drilling rig – That site will hold an investment of around $54M or $60M when finished and will produce somewhere between 3 million and 6 million barrels of oil during its useful life.)

Oil production in North Dakota set another record in August 2014. Total production in the state averaged 1,132,331 barrels per day. Production in Bakken only was 1,068,609 bopd. That is a 1.61% increase statewide and 1.70% in Bakken-only.

Very cool.

On 9/23, I described the prediction from Bentek: Another short term production prediction for Bakken. Time to see how that turned out.

Continue reading “Update on a short term production prediction”

About those dropping oil prices – 1

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(Photo by James Ulvog; 4 teeny tiny slivers of explanation for why gas prices are going down.)

This is first of several posts on the drop in oil prices. What will that do to U.S. production? Amount of new drilling?

10/9 – The Feed – When Should U.S. Shale Producers Worry?

Continue reading “About those dropping oil prices – 1”

How would you like to work in an industry where a monthly output increase of 1.7% is preceded with the description “only”? Welcome to Bakken.

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(photo by James Ulvog taken in October 2013)

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(Photo by James Ulvog, closeup of above pump; notice flare pit in foreground)

Production in North Dakota in July was 1,110,653 bopd, an increase of “only” 1.66% over the slightly revised June number of 1,092,519 bopd. Bakken only production was only up 1.9%.

(Update at bottom of post about that 5% increase for the month.)

Here’s the graph:

ND production July 14

I say “only” because Mr. Helms was expecting an increase of 5% for each of the summer months.

Continue reading “How would you like to work in an industry where a monthly output increase of 1.7% is preceded with the description “only”? Welcome to Bakken.”

More good stuff on the Bakken – 9/10

Here’s a few quick notes on interesting news that I won’t cover in a separate post.

Here is an early estimate for the July numbers. On 8/25, Bentek Energy issued a press release: Production from Bakken, Eagle Ford Rose 3.4% in July. Their prediction is

Continue reading “More good stuff on the Bakken – 9/10”

Production in 3 biggest US oil fields – Aug. ’14

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(Photo by James Ulvog. Four wells on a pad was big news only a short while ago. Now 4 is a small site.)

Only 10 oil fields have surpassed a production level of one million barrels a day. Currently three of them are running in the U.S.:  Bakken, Eagle Ford, and Permian.

I’ve been wanting to find a source for Eagle Ford production. After reading a Carpe Diem post (which I can’t find again), I found a great source: the Energy Information Administration’s Drilling Productivity Report. Check out the second tab, Production by region, and the report data on the right side of the page.

Here is the production for the three top regions, in average daily production for each month from January 2007 through September 2014. Data for the last three months is estimated.

3 field production 8-14

Two notes on the data.

Continue reading “Production in 3 biggest US oil fields – Aug. ’14”