Sunday, September 11, 2011

N. Dakota Oil Production in July is "Off the Charts" It Could Surpass CA By End of Year for No. 3 Spot

North Dakota's "Hockey Stick" Chart of Oil Production
North Dakota's July oil production set a number of new monthly records, including:

1. The most oil ever produced in a single month - 13,131,366 barrels - an increase of almost 14% above the previous record in June of 11,544,331 barrels, and a gain of almost 32% from July of last year.  In just a little more than two years (since June 2009), oil production in North Dakota has doubled to its current record-setting level.

2. The highest-ever number of producing wells at 5,507, an increase of 673 wells from a year ago, and almost 200 more than in June of this year.

3. A new record high 2,384 barrels per well, and the highest-ever daily oil produced per well at 77 barrels.

4. North Dakota's oil wells produced an average of 423,592 barrels of oil every day in July, a new monthly record, and an increase of almost 40,000 barrels per day compared to June.

Bottom Line: At the current rate of ongoing record-setting increases  in North Dakota oil production, it could surpass California (540,000 barrels per day) by the end of the year as the No. 3 oil-producing state in the country, behind only Texas (1,410,000 barrels per day) and Alaska (550,000).    

18 Comments:

At 9/11/2011 1:27 PM, Blogger Benjamin said...

Natural gas and oil drilling is wonderful. Keep it up.

 
At 9/11/2011 2:24 PM, Blogger Buddy R Pacifico said...

How much does it cost to drill a well in this area? $6.5 million to $9 million.

 
At 9/11/2011 3:38 PM, Blogger Benjamin said...

As man's technical abilities continuously improve, there seem to be no shortage of liquid fuels.

At $80 a barrel, we have gluts at Cushing--this despite that much of the world's oil resides in thug states, such as Nigeria, Mexico, Venezuela, Saudi Arabia, Iran, Iraq, Libya, Russia etc. Not a fair deal in the bunch.

If we have free markets in those countries, we would have gluts of oil at $40 a barrel.

We can hope that Iraq and Libya emerge from the darkness, but don't hope too much. The other countries look to be permanently doomed.

 
At 9/11/2011 4:03 PM, Blogger rjs said...

it'd be nice if there were an easy way to get all that oil in cushing to the refineries...

 
At 9/11/2011 4:04 PM, Blogger DI said...

The Bakken formation continues to impress. The operators still have thousands of locations to drill. Search on Bakken at www.petroviews.blogspot.com for more

 
At 9/11/2011 4:09 PM, Blogger Rufus II said...

That's all great, but we still import 9.5 Million bbls/day.

At 77 bbl/day it would take, what, 123,000 more wells to close that gap?

 
At 9/11/2011 4:14 PM, Blogger Rufus II said...

At 700 well/yr that could take awhile.

These wells play out so fast that I don't think hardly any "oilmen" expect to ever see a million bbl/day out of the Bakken.

Don't get me wrong; it's a good thing for America, and a Great thing for North Dakota, but we're going to have to do more.

 
At 9/11/2011 6:11 PM, Blogger juandos said...

"Don't get me wrong; it's a good thing for America, and a Great thing for North Dakota, but we're going to have to do more"...

Well rufus maybe more is being done...

Take a look at this updated map of the lower 48 from the EIA and remember the federal government is usually a bit behind the curve...

 
At 9/12/2011 12:45 AM, OpenID American Delight said...

Quick, somebody call the Sierra Club & parachute environmental rescue squads to North Dakota.. Certainly there is some sparrow or beetle adversely affected by all these new wells.

 
At 9/12/2011 1:28 AM, Blogger Ron H. said...

"That's all great, but we still import 9.5 Million bbls/day."

And that will continue. There is no way to stop importing oil no matter what is done. I'm all in favor of drilling anything that can be drilled, but there's no way to be oil independent, even if there were a reason to do so.

 
At 9/12/2011 9:50 AM, Blogger FactsAreFriendly said...

You might want to post data on any environmental damage that has occurred with this wonderful growth in production.

I suspect that will be a knock out piece of information because it will be tiny relative to the benefit.

However, if it isn't quantified, the greenie cult will argue that North Dakota is being ruined for oil and gas. It is an absurd postion, of course, but without data to refute it they will continue to make it.

Thanks for the great information.

 
At 9/13/2011 12:14 AM, Blogger Ron H. said...

"However, if it isn't quantified, the greenie cult will argue that North Dakota is being ruined for oil and gas. It is an absurd postion, of course, but without data to refute it they will continue to make it."

You are right about that, but those that accuse have the burden of proof. To be of any consequence they must provide the quantified evidence, at which time discussions of that sort can take place in court.

 
At 9/13/2011 9:00 PM, Blogger VangelV said...

If we have free markets in those countries, we would have gluts of oil at $40 a barrel.

LOL...The average production is less than 100 barrels per day per well. Depletion rates are extreme and there is no way to make money at $80 a barrel for the average producer. At $40 almost all companies, even those in the best locations would be losing money.

As usual, Mark is playing the optimism card and is not looking at the actual cash flows and profits being reported. This is the same type of hype that surrounded shale gas a few years back. Notice that Mark is not posting too many positive stories on that front any longer? That is because reality caught up to the hype.

 
At 9/24/2011 3:30 AM, Blogger Tmax said...

How long do you think this will last?

 
At 9/24/2011 8:31 AM, Blogger VangelV said...

How long do you think this will last?

If there is a recession that keeps oil and gas prices low the party will be over soon because there is no way to raise the money necessary to keep drilling the same number of wells each year. If the same number of wells can be drilled each year the party lasts another two years because the creative accounting cannot hide the depletion issue for much longer than 24 months.

I suggest that one way to figure it out is to pay attention to the conference calls by the producers. look at the cash flow reporting and the actual rather than the projected production numbers.

 
At 10/02/2011 3:39 PM, Blogger westexas said...

In the US, there are some good stories about rising Mid-continent production, and US crude oil production (Crude + Condensate, or C+C) production has rebounded from the hurricane related decline that started in 2005, but 2010 production was only very slightly above the pre-hurricane level that we saw in 2004, and monthly US production has been between 5.4 and 5.6 mbpd (million barrels per day) since the fourth quarter of 2009, versus the 1970 peak of 9.6 mbpd.

Incidentally, US net oil imports of crude oil plus products have fallen since 2005, primarily as a result of a large reduction in demand, because of rising oil prices, but EIA data show that the US is still reliant on crude oil imports for two out of every three barrels of oil that we process in US refineries.

Regarding natural gas, the US consumed 9% more natural gas in than we produced in 2009 and we consumed 12% more than we produced in 2010, resulting in a year over year increase in US net natural gas imports, and the US remains one of the world's largest net natural gas importers (EIA).

The EIA shows that global annual C+C has been between 73 and 74 mbpd since 2005, except for 2009, and BP shows that global annual total petroleum liquids production has been between 81 and 82 mbpd since 2005, except for 2009. In both cases, this was in marked contrast to the rapid increase in production that we saw from 2002 to 2005. Some people might call this "Peak Oil,” and we appear to have hit the plateau in 2005, not some time around mid-century.

Only if we include biofuels have seen a material increase in global total liquids production.

However, the real story is Global Net Oil Exports (GNE), which have shown a measurable multimillion barrel per day decline since 2005, and which are measured in terms of total petroleum liquids, with 21 of the top 33 net oil exporters showing lower net oil exports in 2010, versus 2005.

An additional metric is Available Net Exports (ANE), which we define as GNE less Chindia's combined net oil imports. ANE have fallen at an average volumetric rate of about one mbpd per year from 2005 to 2010, from about 40 mbpd in 2005 to about 35 mbpd in 2010 (BP + Minor EIA data, total petroleum liquids).

At the current rate of increase in the ratio of Chindia's net imports to GNE, Chindia would consume 100% of GNE in about 20 years. The data show that developed countries like the US are being forced to take a declining share of a falling volume of GNE. In fact, our work suggests that the US is well on its way to “freedom” from its reliance on foreign sources of oil, just not in the way that most people hoped, as we are outbid by developing countries for access to declining net oil exports.

For some specific case histories and more explanations of net export declines, you will find one of our articles if you do a Google Search for: Peak Oil Versus Peak Exports.

In our "Peak Oil Versus Peak Exports" article, we show the 1972 Texas production peak lined up with the 1999 North Sea peak. These two regions, which accounted for about 9% of total global cumulative crude oil production through 2005, were developed by private companies, using the best available technology, with virtually no restrictions on drilling, and both regions have shown clearly defined peaks, with production declines that corresponded to rapid increase in oil prices. In other words, Peaks Happen, and global crude oil production consists of the sum of discrete regions like Texas and the North Sea.

 
At 10/02/2011 3:41 PM, Blogger westexas said...

Incidentally, just like the overall US, Texas has shown an increase in production, but Texas Railroad Commission data show that 2010 production is still below one mbpd, versus a 1972 peak of about 3.5 mbpd (for some reason, the EIA shows a much higher number for 2010).

Slowly rising global unconventional production will help, but Canada for example has increased their net oil exports by only 0.25 mbpd over the last five years. Over the same five year period, net oil exports from Saudi Arabia fell by 1.9 mbpd. In other words, we would have needed about eight Canadas just to offset the five year decline in net oil exports from Saudi Arabia.

And if we sum the net exports from six non-US producing countries in the Americas--Canada, Mexico, Venezuela, Brazil, Argentina and Colombia--they have collectively seen more than a one-fifth decline in combined net oil exports in five years, from 5.1 mbpd in 2005 to 4.0 mbpd in 2010 (BP).

Regarding Saudi Arabia, our work suggests that Saudi Arabia, in 2005, may have been at the same stage of depletion at which the prior swing producer, Texas peaked in 1972. In any case, Saudi annual crude oil production has been below their 2005 annual rate for five years, with four of the past five years showing year over year increases in oil prices. This was in marked contrast to the rapid increase in production that they demonstrated from 2002 to 2005. Our modeling work suggest that Saudi Arabia will probably be approaching zero net oil exports some time around 2030 to 2035, in 20 to 25 years.

However, the BP data base shows a 20% decline in annual Saudi net oil exports from 2005 to 2010, and if we extrapolate the Saudi's 2005 to 2010 rate of increase in their ratio of consumption to production, they would approach 100%, and thus zero net oil exports, in only 14 years.

 
At 10/03/2011 1:30 PM, Blogger VangelV said...

However, the BP data base shows a 20% decline in annual Saudi net oil exports from 2005 to 2010, and if we extrapolate the Saudi's 2005 to 2010 rate of increase in their ratio of consumption to production, they would approach 100%, and thus zero net oil exports, in only 14 years.

I am glad that not everyone is drinking the Kool-Aid. Mark has been busy hyping the hype without actually looking at any of the meaningful data. One would think that an economist would question a boom that produced no positive cash flows or actual profits.

 

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