Drilling rigs
- We are probably near our top in active drilling rigs. It stands at about 200; most agree that the number will top out at about 225 - 250.
- Older rigs will probably be replaced with newer, more powerful rigs; think H&P
- Roughnecks are gaining experience every day
- More stable employee base is starting to materialize
- Major players suggest that they have adequate fracking crews, many are dedicated crews
- The smaller players do not have dedicated crews and wait in queue for available crews
- Conference calls: major players say they will catch up on fracking; my numbers suggest they won't catch up in the near term; more than 50 percent of wells coming off confidential list are still being placed on DRL status
- Halliburton recently announced they will hire 11,000 more workers; most to the Bakken
- Schlumberger is building huge new complex west of Williston, ND -- heart of the Bakken
- My hunch is that we are yet to see huge surge in frack teams
- Frack teams still gaining experience
- Major players still looking for optimum number of stages (of course, this varies even among wells)
- Major players still testing optimum technology (sliding sleeve; plug and per; zipper)
- Jury still out on sand vs proppants (expense/benefit ratio)
- Water is NOT a problem in the Bakken
- The state cobbled together a $150 million water plan for fracking and drinking water for cities in oil patch
- Lots of chatter on the boards about Bakken players losing their
permitsleases (see first comment below) - My hunch: these guys are smart enough to handle this; they won't lose their good
permitsleases - Lots of horse-trading could result
- Wells are expensive to drill, but they now drill two-section horizontals vs one-section horizontals
- Canary-in-the-coal-mine: companies issuing more stock to raise cash
- Canary-in-the-coal-mine: mergers, buyouts
- Carnary-in-the-coal-mine: poorer wells, dry wells
- Wells require maintenance
- Winters possibly harder on rigs and maintenance crews, increasing need for maintenance folks during winter
- Few number of Bakken wells to date, few mainentence crews
- As Bakken wells increase (166 new wells/month), expect to see surge in maintenance folks
- Construction: gathering facilities (natural gas and oil)
- Pipeline infrastructure
- Eectrical substations
- CRYO plants for natural gas (see earlier note on subject); crude-by-rail terminals
- Despite all the talk about housing issues in the Bakken, projects are moving ahead
- It appears that big operators have "taken by the bull by the horns" in Williston and adding significant housing
- See Kiewit subdivision
- Additional housing now expanding to outlying towns (Killdeer, New Town)
- My hunch: a lot of the roughnecks (single and young) won't move into single-unit homes; will stay in man-camps (for amenities) or move to apartments (with less restrictions)
- Any slack in single-unit housing by roughnecks will be replaced by surge in workers here long-term to maintain the wells
- With crude-by-rail ramping up, takeaway capacity no longer an issue
i believe that the ND rig count ( assuming current laws/price of oil ) to increase by 25 units in 2012. the number would go to 225-250, this allowance is for 25 rigs to start drilling around/south of Dickinson ND, in the TFS and Tyler formations of Stark,Hettinger and Slope county. The oil companies drilling in the bakken will keep the current number of rigs drilling North of the Freeway.
ReplyDeleteDon,
ReplyDeleteThanks. That would make sense. It would also take some pressure off Williston.
In regards to the aging permits, I agree that a high priority will be placed on the good leases and the horse trading is probably in full mode. I believe the same applies to leases in Montana except there are very few rigs in that area and thousands of acres to drill, many of which will be good leases. The clock is running on the Montana leases as most will expire later this year and next. This will be an interesting area to watch.
ReplyDeleteThank you. I know a lot of readers appreciate any information coming out of Montana. I wish I could follow Montana, but I am having enough of a challenge following North Dakota. I make enough mistakes about my home state without adding more from a state I know even less about.
ReplyDeleteThank you for taking time to write.
Renewing Expiried permits is a non issue. The required forms have been filled out and approved so a simple resubmission should suffice. At most some minor changes or new info would be needed.
ReplyDeleteExpiring leases are a potential thorn as the possibility of competition is present and these for the most part are not wildcat areas. Leases from 07 and even 08 were for minimal bonus and in many cases min royalty. The land departments at these companies are going to get an earful if they try to slow roll top lease offers.
Thank you. I will correct the post. I am often writing very quickly (in between other jobs/responsibilities) and use terms interchangeably and inappropriately. That's why a lot of folks don't take the site all that serious; I am more interested on the big picture, and often miss the details.
ReplyDeleteThank you very much for taking time to comment.
Having said that, Lynn Helms recently said that renewing a permit is an issue: NDIC has 250 permits in queue and expiring permits are added to the bottom of the stack, as they come in. I don't know if the time/date stamp on the envelope saves the permit if it expires by the time NDIC opens the envelope and renews the lease. But, it was an important enough issue for Lynn Helms to point it out.
I guess my point is that permit renewal is a (essentially) no cost item for the operator. I can see why ndic is ticked about expiring permit renewals as it adds work load and has the effect of extending time in que for permit approval. The (oversimplified) ndic view would be : if you were not going to drill in one year, then why did you exercise ndic approval process for a permit? (I realize things change)
ReplyDeleteWhether an approved and active permit or an apication for a permit (new or to reactivate an expired permit in any way effects primary term is a function of what the lease says. Most leases have continuing operations clauses but not clear to me if permit activity absent any physical activity on tbe leasehd would allow co clauses as they have traditionally been written to be invoked.
Yes, there has been a lot of chatter/talk/comment about this very subject on Teegue's discussion board, which is linked at the sidebar on right.
ReplyDeleteI really don't know. I have some ideas, opinions, on all of this, but probably half-baked ideas.
For now, perhaps just to follow. The discussion is well known to long-term Bakken folks, but for newbies, something for them to think about.