Monday, December 17, 2012

New Production Record -- Director's Cut: December 17, 2012 -- Less Drilling; Even Less Fracking; More Production; Majority of Bakken Oil Nows Ships by Rail to East Coast, Gulf Coast, West Coast

Transcribed quickly; there could be errors. More to follow.

Original Post
Link here to the NDIC site.

Also, a stunning graph of this production can be found at

  • Oct: 747,239 bopd (preliminary, all-time high)(~ 2.5% increase)
  • Sept: 729,248 bopd
  • Aug: 701,409 bopd
Producing wells
  • Oct: 8,025 (preliminary, all-time high) (93 bbls/day/well)
  • Sept: 7,899
  • Nov: 211 (all-time high was 370 in Oct 2012)
  • Oct: 370 (all-time high)
  • Sept: 273
  • Aug: 261
  • Nov: $81/bbl
  • Oct: $87/bbl
  • Sept: $85/bbl
  • Aug: $81/bbl
Rig count
  • Nov: 186
  • Oct: 188
  • Sept: 190
  • Aug: 198
In October: a decline in drilling, an even greater decline in hydraulic fracturing --> but, an increase in oil production.

Majority of Bakken oil is shipped by rail to east coast, gulf coast, and west coast destinations.

Daily natural gas production did NOT increase from September to October, because: dry gas wells and high gas:oil ratio wells are being shut in.

Construction of natural gas processing plants and gathering systems is now affected by the weatehr.

US natural gas storage is 8% above historic (5-year) average;

Additions to natural gas gathering and processing systems still lags production: gas flared did not change: 30%. Compare with historical high of 36% about one year ago.

Draft BLM regulations for hydraulic fracturing on federal lands have been published; a final rule will not be published until early 2013.

Draft EPA guidance for permitting hydraulic fracturing using diesel fuel has been published; final guidance promised in spring, 2013. Guidance?


  1. In October, 2012 EOG was able to get $106.61/Bbl according to my statement. Compare that with the Director's Cut pricing. I bet rail has a lot to do with this. As stated before, Bakken oil may be selling at a premium to WTI more and more.

    On the other hand it may be due to their hedging activity.

    1. Thank you for sharing that.

      It's long been my contention that the oil price we see on the TV crawler or in the Director's Cut has little relevance to what operators are actually getting.

      You are exactly correct: the price EOG got in this case ($106) was probably related more to contracts written some months ago.

      In addition, you are also correct in the other respect also: I believe the Bakken price is based on what they are getting at Cushing, and we know the over-supply there. But if EOG is shipping oil to refineries on the East Coast, they are "competing" with Brent oil. Look at the price of Brent Oil and $106 for Bakken is a fair price.

      Again, I really appreciate this. Helps newbies understand the issue better than I could post "theoretically."

  2. IIRC, EOG does not say, price net of transport cost. They seem to be using delivered price, without identifying delivery cost. They like that story.

    "Priced against Brent" has become standard industry puffery. They generally don't identify the discount from Brent.

    anon 1