- Average salary of a North Dakta oil worker: $106,000
- Increase in oil rigs in North Dakota since 2005: 300%
- Unemployment rate in Williston, ND: 1.3%
- Surface area of the Bakken: 15,000 square miles
- Hourly pay of fast food restaurants: $15
- A stripper's earnings in one night: $2,000
August 18, 2011: North Dakota production will CRUSH previous record.
January 20, 2011: CLR tells ND bankers 4 - 5 times more oil in the Bakken/Three Forks than official estimates.
January 15, 2011: 168 active rigs. High to date.
January 4, 2011: North Dakota could surpass Alaska in oil production -- Bloomberg.
May 18, 2010: CLR/CEO (Harold Hamm) opines that the Bakken Pool (Bakken formations and TFS formations) has in excess of 8 billion barrels of recoverable oil; official estimates are around 3 billion for the Bakken and 2 billion for the TFS. Presentation, May 18, 2010.
May 14, 2010: North Dakota could surpass California in daily production.
April 12, 2010: Market Analysis.
Bismarck/Mandan news: rigs may set records.
1981: 148 rigs in North Dakota. April, 2010: 107 rigs
Probably won't hit 148 this summer due to lack of water for fracking, housing for workers
Another 20 to 25 rigs on their way into ND once load restrictions (winter) are lifted
Drillers currently pumping about 2% of estimated reserves
Companies talking about pumping as much as 15% of estimated reserves. March 12, 2010April 23, 2010: USA Today has front-page story on growing numbers of "residents"in North Dakota and effect on the national census. Click here for new posting, same subject.
February 28, 2010: "Larry" on the Bakken Shale Discussion Board, February 28, 2010, posted the following: the best location in the Bakken (currently) is Austin township; currently there are 35 wells in that township and each well has averaged $18 million in oil production at the wellhead. Austin township has generated $630 million in gross revenue, and continues to generate $30 million monthly.
February 24, 2010: Whether or not the Bakken is over-hyped is in the eyes of the beholder, and it depends on one's perspective. Obviously, for these Native Americans, the Bakken is not over-hyped!
February 13, 2010: Industry experts say the drilling program for the Bakken will last through 2030 and production from the Bakken will continue through 2100.
February 7, 2010: Someone (Irish Oil and Gas) just paid the equivalent of $4.7 million/section (640 acres) for the mineral rights in 120 acres in sections 11, 12, and 13 in T155N-92W. For perspective, $600/acre ($384,000) was a top price not too long ago.
137,000 barrels of oil from two wells in first 90 days of combined operation.
Look at all the wells reported on Feb 8, 2010, new wells reporting. EOG has a couple of wells which EACH, at $60/bbl, produced almost $4 million worth of oil at the wellhead in 120 days or less. That will almost cover the cost of drilling the well; CLR opines that wells in the Bakken will last into 2029 (yes, at a declining rate, of course). See bullet above, stating that industry experts say the drilling program will extend through 2030.
Click here for my page for "monster wells" in the Bakken.
EOG opines that total recovery (EUR) from their "core" wells in the Parshall oil field might be 700,000 barrels (at $60/bbl = $42 million). It cost about $6 million to drill a horizontal well in 2009. [Update: EUR has now been increased; oil is at $80/bbl; and cost of drilling is dropping.]
Back in 2009, the CLR/CEO hedged some of his oil sales for January, 2010, at $80/barrel.
Continental Resources (CLR) opines that dual laterals targeting two different formations could result in an additional 400,000 barrels over the lifetime of some of these Bakken wells. 400K barrels at $60/bbl = $24 million. $42 million + $24 million = $66 million for a well that cost about $6 million to drill. In the big scheme of things, production costs are minimal once the well starts flowing.
Many producers state that the cost of oil extraction from the Bakken in 2009 was about $15/bbl. EOG says simply that "at $40/bbl, the Bakken is robust."
There are about 4,000 active wells in North Dakota. The current boom in the Bakken in North Dakota began in 2006. How many permits were granted in the years since 2006, and how many of those permits have been drilled?
- 2006: 422 permits; 195 have been drilled
- 2007: 497 permits; 336 have been drilled
- 2008: 917 permits; 728 have been drilled
- 2009: 627 permits; 176 have been drilled
- 2010: 1,680 permits; 436 have been drilled
As of February 12, 2010 (the 43rd day of the year), NDIC had granted 148 new permits since the beginning of the year. That trends to 1,256 permits.
What about the number of active rigs in North Dakota? Well, this should suggest something:
November, 2008: 95 rigs (price of oil peaked at $150/bbl)Capacity of pipeline and railroad tanker system to transport oil out of North Dakota:
May, 2009: 33 rigs (price of oil had dropped significantly)
Feb, 2010: 94 rigs (price of oil in trading range, $70 - $80)
2008: 200,000 bbls/day (if I remember correctly)On February 5, 2010, there were 757 wells on the "confidential list." Approximately 50 wells come off the confidential list each month for the next six months.
2010: 400,000 bbls/day (estimate)
By mid-2010, there should be about 100 active rigs in North Dakota. Although some producers say they can drill a well in less than 20 days, I still use as a rule of thumb that one rig will drill about 10 wells/year. One needs to take into account time to move the rig, prepare it for drilling, bring it down once it is complete, etc. 100 active rigs x 10 wells/year/rig = 1,000 rigs in 2010. [Wow, that estimate was off; by mid-2010, the active rig count was up to 140, ending the year at 166.]
Producers use a series of drilling rigs: one rig for the first few days to get through the "soft" stuff, and then the "big" rig to drill to total depth (TD).
It appears there are others out there who are as irrationally exuberant as I am about the Bakken.
Udpated: May 14, 2010 (not all data was updated)
Will Bakken production eventually move over to sheridan county MT?
ReplyDeleteYes, but perhaps not in my investing lifetime.
ReplyDeleteSome production is already very close to Sheridan County.
Any number of corporate presentations show the Bakken extending into northeastern Montana. Geology will determine how profitable it will be in that area or any area.
Check out "http://oilshalegas.com/bakkenshale.html."
whats happening south/south east of dickinson.
ReplyDeleteThe area around Dickinson is centered in two areas:
ReplyDeletea) in the immediate area of the city, including city limits; generally targeting the Lodgepole formation, which has had some good conventional (vertical) wells; and,
b) Whiting is extending their Lewis and Clark prospect in the area from Belfield to South Heart (west of Dickinson). This initiative is getting very, very exciting. WLL is targeting the Three Forks formation in the South Heart area.
There appears not to be much activity south or east of Dickinson; this is farther southeast than where the North Dakota Bakken produces. Maps show the Three Forks extending into this area but it may be awhile before they get to it.
Interestingly enough, there are three confidential wells southeast of Dickinson -- and they are very lonely wells: Fidelity has one; Oil for America has two. They are all wildcats, and they are all confidential. If they were to be even mediocre wells, that would be quite something.
There's no doubt that those who own Bakken Shale Mineral Rights would need to come to a decision later on if they are to keep their rights or sell those off if they need the money upfront.
ReplyDeleteYes, that would be true.
Delete