I said this current poll would be up for only a couple of days. This one had to do with the severe Russian weather storm, one of the worst on record. I was curious if folks were even aware of the storm prior to seeing the story linked here.
Results of the poll (of the 52 that even bothered to vote):
- Yes, 12% said they were aware of the storm prior to seeing it on the blog;
- No, 56% said they were not aware of the storm prior to seeing it on the blog; and,
- 33% asked, "what storm." (Due to rounding, numbers add up to 101%).
The other day, Lynn Helms (Director, NDIC) opined that "we" would eventually get back to 200 rigs which would become the new "norm."
So, knowing that there are a lot of folks who have their collective ears close to the Bakken ground, I'm curious if you agree with Lynn Helms.
Do you think there will be 200 active rigs in North Dakota by September 30, 2013?
No. World economy will depress demand and price. Also, other North American shales will be targeted. You got it 175 is the magic number
ReplyDeleteNo
ReplyDeleteThere is a finite number of total rigs in the United States, give or take a few, and there are more areas across the country that are competing for rigs so what is available is gonna get spread out even further rather than fatten up the Bakken rig count. And since the Bakken is now mostly held by production, the rigs that are there will be moved around rather than new ones coming online.
I wonder how many rigs are currently in use in North Dakota?
I wonder how many rigs are idle in North Dakota?
Ad these together and that will be the maximum total rigs available.
If it is well over 200, maybe 200 could be the new norm...but my guess is that there are not too many rigs idle in the patch.
Therefore, I say "NO"
One question is what is the mix of old rigs and new rigs. Since we hit the high of 220, lots of talk older rigs replaced with newer more efficient rigs. With rigs counts going back up are the new rigs being added to the mix or the older rigs just drilling again. If it is the newer rig is the answer, the impact is twofold, one rig count is going back up which is a positive and secondly, the newer rigs drill more wells in a year which means more wells are going to be drilled with same equipment, leading to more long term jobs
ReplyDeleteYou are exactly correct. That's why so many of these numbers are somewhat irrelevant. Same with IPs.
DeleteEach of these numbers (rigs, IPs, etc) are data points.
Experience counts for a lot; multi-well pads with walking rigs make a huge difference.
But, all things being equal, regardless of the mix, if there are 200 rigs drilling, there are more jobs than if there are 150 rigs drilling. To the best of my knowledge.
You are correct in that more drilling jobs exist with 200 rigs than 150. Average rigs has 125 full time equivalent jobs. The downside to these jobs is the transient nature. These are many in the man camps.
ReplyDeleteWhat is hidden and in 5 or 10 years people will look at is all the perm jobs created. Each completed well equates to 1-2 perm jobs. It is these jobs that have the family and stability element to them. 2,0000 wells a year for 5 years, 10 years, all of a sudden you are looking at the same number new perm jobs as the number of temp jobs on the rigs (and the rig jobs will still exist) this is where the long term perm growth comes into play. 20,000 perm jobs means 60-80,000 people with dependents. These are new jobs, with zero unemployment, these people will move to ND, not be from current ND residents. If this happens and it is, then the additional jobs come with, schools, police, service etc....
I think the new leading indicators are permits, new wells and production. As long as these keep going up, the long term future is good.
It is interesting to read the history of Calgary.
Deletehttp://en.wikipedia.org/wiki/Calgary
At the link, note the photograph of how Calgary looked in 1885.
And at the link: Although oil was discovered in Alberta in 1902, oil did not become a significant industry in the province until 1947 when huge reserves were discovered.
It is now estimated that the Bakken has a trillion bbls of original oil in place (OOIP), which exceeds the largest oil field in Saudi Arabia.
Original estimates of recovering 1 - 3% OOIP appear be very conservative. Most folks seem to be suggesting that operators are recovering 3 - 5% and some even suggest as much as 8%.
There are less than 8,000 active wells in North Dakota today. It is estimated by several sources that 50,000 wells will be drilled into the Bakken. That estimate was made before CLR started talking about four benches of the Three Forks, and confirming three so far to date.
A UND source says that active drilling in the Bakken will continue until 2030 (again, well before more recent estimates of the Bakken's potential). Housing mortgages generally go out about 30 years; some 15 years. My own horizon goes out about ten years.
Unless there is some geo-political event that kills the Bakken, the Bakken will provide a lifetime of work for many folks.