Bakken December Data, Big Decline

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Includes: BNO, DBO, DNO, DTO, DWTI, OIL, OLEM, OLO, SCO, SZO, UCO, USL, USO, UWTI
by: Ron Patterson

The Bakken and North Dakota tight oil production data is out.

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Bakken production was down 28,604 barrels per day to 1,096,044 bpd. All North Dakota was down 29,506 bpd to 1,152,280 bpd.

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This is just the last two years of the chart above. It gives a slightly better look at what is happening.

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Barrels per day per well fell to 106 in the Bakken and to 90 in all North Dakota.

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From the Director's Cut

Producing Wells

November 13,100

December 13,119 (preliminary)(all time high was Oct 2015 13,190)

10,756 wells or 82% are now unconventional Bakken-Three forks wells

2,363 wells or 18% produce from legacy conventional pools.

Permitting

November 125 drilling and 0 seismic

December 95 drilling and 0 seismic

January 78 drilling and 0 seismic (all time high was 370 in 10/2012)

ND Sweet Crude Price

November $32.16/barrel

December $27.57/barrel

January $21.13/barrel

Today's $16.50/barrel

(lowest since February 2002)(all-time high was $136.29 7/3/2008)

Rig Count

November 64

December 64

January 52

Today's rig count is 41 (lowest since July 2009 when it was 40)(all-time high was 218 on 5/29/2012)

The statewide rig count is down 81% from the high and in the five most active counties rig count is down as follows:

Divide -85% (high was 3/2013)

Dunn -76% (high was 6/2012)

McKenzie -75% (high was 1/2014)

Mountrail -88% (high was 6/2011)

Williams -90% (high was 10/2014)

Comments:

The drilling rig count was steady from November to December, fell sharply from December to January, and again into this month. Operators are now even more committed to running fewer rigs as oil prices remain at very low levels. The number of well completions remained steady from 77 (final) in November to 76 (preliminary) in December.

Oil price weakness is now anticipated to last into at least the third quarter of this year and is the main reason for the continued slow-down. There were no significant precipitation events, 5 days with wind speeds in excess of 35 mph (too high for completion work), and 2 days in Williston with temperatures below -10F.

Over 97% of drilling now targets the Bakken and Three Forks formations.

At the end of December there were an estimated 945 wells waiting on completion services, 24 less than at the end of November. Crude oil take away capacity remains dependent on rail deliveries to coastal refineries to remain adequate.

The drop in oil price associated with anticipation of lifting sanctions on Iran and a weaker economy in China is expected to lead to further cuts in the drilling rig count. Utilization rate for rigs capable of 20,000+ feet is about 30% and for shallow well rigs (7,000 feet or less) about 20%.

Drilling permit activity declined November to December then fell further in January as operators continue to position themselves for low 2016 price scenarios. Operators have a significant permit inventory should a return to the drilling price point occur in the next 12 months.

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Bruno Verwimp posted me the above chart. He says so far the Bakken is following his curve exactly.