Idle Chatter -- Average Daily Production Per Well -- February 28, 2018

During the early days of the blog, one of the metrics I tracked was the average crude oil production/well/day on a monthly basis. For newbies, I thought it was quite striking. In broad brush:

• prior to the Bakken: 35 bopd/well
• when the Bakken hit its stride: 100 bopd/well
• during the Saudi surge, late 2014 - late 2016: trended toward 75 bopd/well
• lately, as WTI trends higher: trending back toward 85 bopd/well

The tables below are from the NDIC.

First table: 2006 - 2009. The "Bakken discovery well" was discovered in 2007.  The last column shows the increase in production/well.

Second table: 2011 - 2014:  By now, the Bakken had hit its stride, and reached a peak of 100+ bopd/well. It was heady days for the Bakken.

Third table: 2015 - 2017. But then the Saudi Surge, late 2014 through late 2016, with an overhang through early 2017. By November, 2016, average daily crude oil production per well had dropped to 72 bopd, a considerable drop from a high of 104 bopd. Looking back, it's amazing companies did as well as they did to stay in business. Some did not.

With the price of WTI trending toward $60+, North Dakota wells (for the most part, Bakken/Three Forks wells) are clawing their way back toward the mid-80's.

There's something else to consider. Some folks made a big deal out of the fact that daily oil production dropped 1.3% from November, 2017, to December, 2017.

But note that there were 17 fewer wells operating in December, 2017, than in the previous month. Most wells in the Bakken come off line for operational reasons.

In addition, the number of operating wells generally increases anywhere from 50 to 250 wells, month-over-month. That decreased number of wells in December, 2017, goes a long way explaining the drop in production, December over November. Weather may have also played a part.

With wells getting better and better, one should see the last column -- average daily production/well -- improve sooner than later. Assuming the decline rate of existing wells can also be managed.