Wednesday, July 14, 2010

Record High North Dakota Oil Production in May

Following an ongoing pattern, North Dakota continued to set more new records in May for monthly oil production (data here), see previous CD post here. The following are new, all-time record highs set in May:

Daily Oil Production: 296,423 barrels in May; 4.23% increase from April, 43.85% increase from May 2009, 89.5% increase from May 2008.

Total Monthly Production: 9,189,101 barrels in May, the first time that monthly production topped 9 million barrels.  Amazingly, oil production in North Dakota has doubled in just the last two years. 

13 Comments:

At 7/14/2010 5:48 PM, Anonymous Anonymous said...

They shouldn't be drilling on land. They should be drilling 5,000 feet underwater.

 
At 7/14/2010 6:09 PM, Blogger Craig said...

I'll bet this really infuriates the EPA. Must.stop.drilling

 
At 7/14/2010 6:10 PM, Blogger Dr William J McKibbin said...

Interesting data find -- thanks...

 
At 7/15/2010 1:08 AM, Anonymous nisha said...

Really Appreciated to you for this post
Thanks
bba

 
At 7/15/2010 6:55 AM, Blogger juandos said...

"Amazingly, oil production in North Dakota has doubled in just the last two years"...

This sort of great news is driving an increase in both investment and jobs in the area...

 
At 7/15/2010 8:53 AM, Blogger rufus said...

Meanwhile, Global oil production fell 830,000 Barrels/Day in May, and June.

The Red Queen is getting tired, I think.

 
At 7/15/2010 10:35 AM, Anonymous gettingrational said...

It is interesting that the daily oil per well has doubled recently. I know very little about the industry but maybe bigger wells found recently?

 
At 7/15/2010 1:03 PM, Anonymous Peterk said...

"...maybe bigger wells found recently?"
more than likely increased fracturing and other recovery enhancements to each well

 
At 7/16/2010 9:08 AM, Blogger VangelV said...

It is interesting that the daily oil per well has doubled recently. I know very little about the industry but maybe bigger wells found recently?

Depletion rates are huge. The increase has come from a high level of drilling activity which was financed by companies looking to prove up reserves so that they could sell their properties to companies with a desperate need to show that they have a handle on their reserve inventory. New wells have much higher output for a few months so when you get many of them the per well production for an area goes up. That is particularly true if old wells that only a few barrels per day are not considered active and no longer counted.

The problem for the oil industry in North Dakota is the uneconomic nature of most of the wells. Most activity is not really economic and depends on depletion assumptions to seem viable. But the math does not work and there is no hope for a ND boom in oil production.

Eventually the shoe will drop and economic reality will prevail. But before then the environmental issues may bring attention to the drilling methods that have on occasion created a problem for the local water supply.

 
At 7/16/2010 5:11 PM, Blogger juandos said...

"The problem for the oil industry in North Dakota is the uneconomic nature of most of the wells"...

Do you have a credible link backing that statement up vangeIV?

 
At 7/18/2010 11:00 AM, Blogger VangelV said...

Do you have a credible link backing that statement up vangeIV?

I provided the links in the previous postings about shale oil. I will try to find them again and will post them again when I get a bit of time. Until then I suggest that you look at Arthur Berman's last column for World Oil. If you read carefully you will find that the economics are dependent on the EUR assumptions made by operators. The real world numbers do not support those assumptions and the greater depletion rates make shale oil uneconomic in most formations. You can find a link to Arthur's last column below. While you are reading you might want to think about why most of the original players have sold their proven shale properties to larger players needing to book reserves in order to support their stock valuations.

http://www.scribd.com/doc/22092515/Art-Berman-s-Last-World-Oil-Column

 
At 7/18/2010 11:15 PM, Blogger callmecrude said...

$5.5 million per well and over a 130 rigs drilling in North Dakota. with a 99% success rate. And not economical???? Foolishness!!! And stop drilling on land??? are you nuts??? As a ND mineral owner w/two producing wells I will atest to the depletion but to say theyre not economical is foolish. And with the worlds oil depleting faster than we can find it and the President shutting down the gulf North Dakota will continue to BOOM for several more years. And we will still all pay $150 a barrel and $5 gal in the next two years. :)$$$4me

 
At 7/19/2010 11:00 PM, Blogger VangelV said...

$5.5 million per well and over a 130 rigs drilling in North Dakota. with a 99% success rate.

How do you define success? We know that the wells will produce oil. But for them to be a success they have to produce a lot of it to generate a decent return. That is not happening, which is the reason why the original owners of properties are selling them off as soon as they drill off enough wells to sell them to majors that need the reserves but not necessarily the immediate production in order to keep their stock prices high.

And not economical???? Foolishness!!!

The ultimate recovery is too low for most of the wells to be economical. While some will provide great returns
for their owners they will be the exceptions.

And stop drilling on land??? are you nuts???

The government idiots at the EPA may be nuts. All you need is one well damaging the local water supply and you will be looking at a drill stoppage until drillers use safe substitutes for the frac fluids and drill mud.

As a ND mineral owner w/two producing wells I will atest to the depletion but to say theyre not economical is foolish.

As I said, most are not economical at $75-80 oil because they will not produce enough to pay for financing the wells. You do the math and figure out how many years of production you need when you start with 130 bpd and have a 75% depletion rate.

 

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