As of yesterday, I counted 1,613 new oil well drilling permits in North Dakota (yes, some of them are for salt water disposal) for calendar year 2010.
At that pace, "we" are on track for 1,697 new permits for 2010. I have a hunch new permit action will slow substantially as we get closer to the last two weeks of December.
Most likely, the final number will be 1,680 +/- 20.
Most of the permits have been for the Bakken; some for Three Forks; and, a smattering of others for the Madison, Red River, Lodgepole, Birdbear, and others.
For comparison, here are the number of permits that were issued in the current boom (these are from my database and differ slightly from official NDIC numbers):
2006: 422
2007: 497
2008: 953
2009: 626
2010: 1,613 (as of December 13, 2010)
Note: there are about 5,000 active wells in North Dakota at the present time.
The number of wells that reported out results for those years:
2006: 195
2007: 359
2008: 706
2009: 484
2010: 325 (includes wells that have reached total depth but have not reported production numbers)
For previous commentary on this, click here.
should 2010 read 1325?
ReplyDeleteNope, that's correct according to my database. I only count permits that have reported something to suggest they were in fact drilled: a) NDIC report with IP; b) NDIC report with total depth, but no production number; c) NDIC report "plugged or producing; or, d) a press release.
ReplyDeleteObviously there are probably another 100 or 200 wells that have been drilled to depth, maybe more, maybe many more.
But I have no way of telling if a permit is drilled based on confidential lists, etc. The confidential period is six months in North Dakota and until that information is released, I have no idea if a well is drilled for a given permit. Most permits are issued as a "tight hole" and are confidential once issued.
For my purposes, my database is actually quite accurate in the big scheme of things. Folks in the industry with access to all reports will have much different numbers.
Note that 422 permits were granted in 2007 and yet only 359 wells were reported out for those 422 permits.
I don't expect the majority of the approximately 1,700 permits issued in 2010 to be reported in 2010; the majority will be completed and/or reported in 2011. Unless they are great wells garnering a press release, almost all wells spudded after August won't be released from confidential status until 2011.
I wouldn't pay much attention to the "number of wells that have reported" until about one year after the permit was issued. This will give one an idea of a) the backlog; and, b) how many permits were issued, but then for various reasons not acted upon. Look at 2006 for a great example (I probably missed a few) but I only have data for 195 permits despite the fact that 422 permits were issued. My gut feeling is that as the boom took off, producers delayed acting on some permits for various reasons. It's easy to renew a permit.