July, 2015, Director's Cut -- North Dakota Production Unchanged (Down 0.8%)

Comment: timely article sent to me by reader, received while this month's Director's Cup was being disseminated. CNNMoney is reporting:

American Power Group Corporation announced today that its Trident NGL Services Division has secured its second flare capture services relationship with one of the largest oil companies in the world whose identity has not been disclosed due to non-disclosure and competitive reasons.

APG's Trident Services Division will be up-fitting two of the customer's well sites with Trident's Modular Flare To Fuel™ Capture and Recovery System in the North Dakota Bakken oil and gas region.

Installation of both systems is scheduled to occur in the next thirty to sixty days allowing Trident to begin monetizing the captured flare by converting the gas to saleable Natural Gas Liquids (NGL).

APG recently announced a license agreement with Trident Resources, LLC for the exclusive worldwide right to commercialize Trident's proprietary NGL processing technology. APG purchased certain of Trident's operating assets including two existing mobile NGL processing systems and recently announced a commitment for the financing of two additional systems in response to strong demand from oil and gas operators looking for an effective solution to capture their flare on existing remote and stranded well sites.

An average remote or stranded well site producing one to two million cubic feet of flared gas per day has the capacity to produce several million gallons of NGL per year making this a multi-billion dollar regulatory-driven market.

What is the NGL market and where does APG's Trident NGL Services Division fit? When oil is extracted from shale, a mixture of hydrocarbon gases (methane, ethane, propane, butane, pentane and other heavy gases) reach the surface at each well site. These gases are either gathered in low-pressure pipelines for downstream NGL extraction by mid-stream processing companies or flared into the atmosphere when the gas-gathering infrastructure is too far away (remote well sites) or the pipeline is insufficient to accommodate the volumes of associated gas (stranded well sites).

These remote and stranded well sites are under increasing regulatory requirements to either capture the flared gas or significantly reduce oil output. APG's proprietary Trident NGL capture and recovery process is the emerging leader in capturing and converting a higher percent of the gases at these remote and stranded well sites with its mobile and modular design when compared to other competitive capture technologies that cannot meet the 85% capture regulation due on January 1, 2016. NGL's can be sold to a variety of end markets for heating, emulsifiers, or as a combined NGL liquid called Y Grade that can be sold to midstream companies who separate the liquids into their final commodities.

I track the "cuts" here. 

Disclaimer: this update is always done in haste; typographical and factual errors are likely. This is for my use only. If this is important to you, you should go to the source. 

Note: facts and opinions are interspersed in the note below. Do not make any investment or financial decisions based on what is posted below; there will be factual and typographical errors. If this information is important to you, go to the source. 

The July data is posted at this link: https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2015-09-14.pdf

Important data points:

• Today, pricing: $30.25
• Bakken price in August: $29.52
• Fracklog: 914 (70 more than at end of June, previous reporting period)
• Completions: 119 (149 in May, 2015) -- more wells going to SI/NC status
• To maintain production near 1.2 million bopd: 110 - 120 completions needed each month
• Statewide flaring: 20% (an increase of 3%) 

Delta, crude oil production: 

• 1,211,328-1,201,920 = 9,408
• 9,408 / 1,211,328 = 0.8% decrease month-over-month

Oil:  

• July, 2015: 1,201,920  [My hunch at 9:08 a.m., September 14, 2015: 1,205,789]
• June, 2015: 1,211,328 (final)(second highest; highest was December, 2014)
• May, 2015: 1,202,615 (final)
• April, 2015: 1,169,045 (final)
• March, 2015: 1,190,502 (final); 1,190,582 bopd (preliminary)
• February, 2015: 1,178,082 bopd (revised, final); 1,177,094 (preliminary)
• January, 2015: 1,191,198 bopd (all time high was last month)
• December, 2014: revised, 1,227,483 bopd (preliminary - 1,227,344 bopd - preliminary, new all-time high)
• delta: see above

Producing wells:

• July, 2015: 12,940 (preliminary -- new all-time high)
• June, 2015: 12,868 (final revised -- new all-time high)
• May, 2015: 12,679 (final revised -- new all-time high)
• April, 2015: 12,545 (final revised -- new all-time high)
• March, 2015: 12,443 (final revised -- new all-time high)
• February, 2015: 12,199 (final revised -- new all-time high)
• January, 2015: 12,181 (preliminary -- new all-time high)
• December, 2014: 12,134 (preliminary, new all-time high)
• November, 2014: 11,951 (revised); 11,942 (preliminary, new all-time high)
• October, 2014: 11,892; revised 11,942 (preliminary, new all-time high)
• September, 2014: 11,758 (revised); 11,741 (preliminary; new all-time high)
• August, 2014: 11,565

Permitting: 

• August, 2015: 153
• July, 2015: 233
• June, 2015: 192
• May, 2015: 150
• April, 2015: 168
• March, 2015: 190
• February, 2015: 197
• January, 2015: 246
• December, 2014: 251
• November, 2014: 235
• October, 2014: 328
• September, 2014: 261
• August, 2014: 273
• All-time high was 370 in 10/2012
  

Pricing: 

• Today, 2015: $30.25
• August, 2015: $29.52
• July, 2015: $39.41
• June, 2015: 47.73
• May, 2015: $44.70
• April, 2015: $38.33; $36.25 (lowest since February, 2009, and January, 2015) (all-time high was $136.29 7/3/2008)
• March, 2015: $31.47
• February, 2015: $34.11
• January, 2015: $31.41
• December, 2014: $40.74
• November, 2014: $60.61
• October, 2014: $68.94
• Sept, 2014: $74.85
• August, 2014: $78.46

Rig count:

• Today:  69 - lowest since November, 2009, when it was 63 (all time high was 218 on 5/29/2012)
• August: 74
• July: 73
• June: 78
• May: 83
• April: 91 (lowest since January 2010)
• March: 108
• February: 133
• January: 160
• December, 2014: 181
• November, 2014: 188
• October, 2014: 191
• Sept, 2014: 193
• August, 2014: 193
• July, 2014:  192

Director's comments:  [see source]

The number of well completions rose sharply from 116 (final) in May to 149 (preliminary) in June as a large number of NC status wells reached the 1-year deadline for completion or TA approval.

Drilling rig count: 

• rig count dropped 5 this month (August)
• dropped 5 from June to July
• dropped 5 from May to June
• dropped 8 from April to May
• dropped 17 from March to April 8
• dropped 25 February to March
• dropped 27 from January to February
• dropped 7 from November to December
• dropped 21 from December to January
• dropped 23 from January to date of previous month's Director's Cut

Rig utilization: [see source]

• no change
• 20,000+ feet rigs: 45% 
• shallow well rigs: 25% 

Well completions: 

• July: 119 (preliminary)
• June: 149 (final)
• May: 116 (final)
• April: 102 (final -- astounding drop)
• March: an astounding 194 (final)
• February: 42
• January: 63
• December: 173 (preliminary)
• November: 48

Weather: 

• one significant precipitation event in the Dickinson area
• 12 days with wind speeds in excess of 35 mph (too high for completion work)
• no days with temperatures below -10F

Wells waiting to be completed:  

• At end of July, an estimated 914 wells waiting to be completed, 70 more than at end of June
• At end of June, an estimated 844 wells waiting to be completed
• At end of May, an estimated 925 wells were waiting to be completed, no change
• At end of April, an estimated 925 wells were waiting to be completed, an increase of 45
• At end of March, an estimated 880 wells were waiting to be completed, a decrease of 20
• At end of February, an estimated 900 wells waiting to be completed, an increase of 75
• March, 2015, Director's Cut -- 825 wells -- an increase of 75-- January data
• Previous Director's Cut -- 750, a decrease of 25
• Red Queen: 110 - 120 completions per month to maintain 1.2 million bopd

Flaring: 

• capture target, current: 80% -- was 85% last month
• capture target, after October, 2016: 90%
• flaring today: 20%, up 3%; statewide capture 80%
• finally, the Tioga gas plant was down slightly to 88% of capacity (90% last month; 93% previous to that)
• expansion of gas gathering from south of Lake Sakakawea is still delayed; the project was approved, but it was approved too late for the 2015 construction season, resulting in a one-year delay.

Gas capture statistics:  

• statewide: 80% (October 2014 target was 74%; CY 2015 capture target is 77%)
• FBIR Bakken: 81%
• NOTE: the daily volume of gas flared from May to June was up just 1.6 MMcfd; last month the volume of flaring increased 30  MMCFD (previous month increased 23.5 MMCFD (a reversal from last month when flaring had decreased month-over-month)
• NOTE: previously announced -- ONEOK announced plans to hook up 700 wells in the Bakken (natural gas hook-ups)

Fracking policies/regulations: (see source linked above; way too much to post)