New Director's Cut -- October 12, 2011 -- The Bakken, North Dakota, USA

Link here.

Soon to surpass California and Alaska. 

Production hits all-time high in North Dakota (again):
Aug, 2011, oil: 444,142 bopd (all time high)
Jul, 2011, oil: 424,975
Aug producing wells: 5,951(all-time high)
Jul producing wells: 5,756

Permitting
Aug, 2011: 207 (all time high: 245, 2 Nov 10)
Jul, 2011: 136

Pricing
Aug, 2011: sweet crude, $81.43
Jul, 2011: sweet crude, $90.60
Back of envelope calculations:
Aug, 444,142 x $81.43 = $36.166 million
July, 423,550 x 90.60 = $38.373 million
June 384,809 x 91.69 =$35.283 million.

Director's comments:

Rig count remained steady, but production increased almost 5 percent. Bowman County Red River production was stable at about 27,000 bbls with one well drilling. The idle well count dropped significantly agine to 733 wells, but normal is 450, indicating a continuing backlog of almost 300 wells waiting to be fracked.

Rigs
20,000-foot capable rigs: over 95% utilization rates (last month >90%)
7,000 or less-capable rigs: less than 50% utilization rates

Permitting is below record levels. As fall approaches and the rig count rises permit activity is expected to increase so locations can be built prior to winter weather.

The number of wells drilling on federal surface in the Dakota Prairie Grasslands is down to 3.

With regard to flaring:
The low value of processed natural gas does not justify investment in infrastructure, but the natural gas liquids make gathering and processing of Bakken gas economic. The policy set forth in statute for the North Dakota Industrial Commission is to promote production and to prevent waste in order that the greatest possible economic recovery of oil and gas is obtained. The Industrial Commission has encouraged and supported various projects that utilize the resource, ultimately reducing the amount of flared gas in oil country. Up to this point in the Bakken play gas has been flared at record levels in order to promote the resource to the natural gas gathering and processing industry and demonstrate the size and potential of the resource. The result is a plan presented by industry to invest over $3 billion in natural gas gathering and processing infrastructure in 2011, 2012, and 2013. As this investment is made and gas gathering infrastructure is built, Commission policy can be expected to focus even more towardpreventing waste in the natural gas arena.