It is a graph of the average number of barrels of well produced per well in North Dakota for each year since 1951 when there was one well. There is one exception: the last two data points are January, 2010, and June, 2010.
So, "1" on the horizontal axis = 1951 and "56" = 2007. The last data points are 2010.
During earnings season, many of the oil companies operating in North Dakota update their presentations. As usual, we see the huge decline rate in Bakken wells. A typical Bakken graph will show an initial production of 1,000 barrels of oil in 24 hours, but it will decline rapidly and stabilize at 200 barrels of oil.
On January 1, there were 4,391 wells, and average daily amount of oil produced in January, 2010, was 236,175 barrels of oil. In June, 2010, there were 4,751 wells, and the average daily amount of oil produced in June was 314,602 barrels of oil.
The graph speaks for itself.
I was curious how the 200 bopd stacked up against historical averages, so I put the NDIC data into a graph.
If the total amount of oil produced in Jan 2010 was 236,175 barrels and there were 4640 wells, then, each well had produced only 51 barrels that month, or less than 2 barrels per day. Can this be true?
ReplyDeleteGood catch. My mistake. I have corrected it. The "236,175 barrels" is the average DAILY amount of oil produced during that month. The graph is correct.
ReplyDeleteI have also corrected the number of wells. I went back to NDIC's site to get their number.
The average DAILY production from each well in North Dakota during the month of January, 2010, was 54 barrels/day. By June, 2010, six months later, that had risen to 66 barrels/day.
There are a lot of old wells in North Dakota but one can only imagine how little some wells are producing if the average can be brought down to 50 - 60 barrels when there are new wells producing 500 barrels/day. It costs almost nothing to keep pumping that oil once the well has been paid for. Also, in some cases, holding a lease by production may be more valuable than the dollar amount of the actual production.
The importance of this graph will become evident in one year. Just prior to this boom, the average DAILY amount of oil production from each well was down to 25 barrels of oil. It is now up to over 60 barrels of oil per day, and this has occurred in just a couple of years.
One can see the entire North Dakota history by going to the NDIC website home page, and clicking on "General Statistics" on the sidebar on the right, about six items down.
That will take you to a new page, and you can click on "Historical monthly oil production statistics" to see the entire history by month. It's pretty amazing.
Again, thank you for bringing this to my attention.