Friday, January 11, 2013

Director's Cut: November, 2012 -- North Dakota Oil Production Drops Month-Over-Month; Weather Cited As Factor; Snowiest Day in Williams County Since 1901; Permitting Less Than Half Just Two Months Earlier

Updates


Original Post 
Director's Cut, November, 2012 --  Link here to the NDIC site.

Oil
  • Nov: 733,078 bopd (~ 2.0 % decrease; see comments from director below)
  • Oct: 747,212 bopd (all-time high)(~ 2.5% increase)
  • Sept: 729,248 bopd
  • Aug: 701,409 bopd
Producing wells
  • Nov: 8,101 (preliminary) (new all -time high)
  • Oct: 8,035
  • Sept: 7,899
Permitting
  • Dec: 154 ( significant decrease)
  • Nov: 211 (all-time high was 370 in Oct 2012)
  • Oct: 370 (all-time high)
  • Sept: 273
  • Aug: 261
Pricing
  • Dec: $77/bbl
  • Nov: $81/bbl
  • Oct: $87/bbl
  • Sept: $85/bbl
  • Aug: $81/bbl
Rig count
  • Dec: 184
  • Nov: 186
  • Oct: 188
  • Sept: 190
  • Aug: 198
Month-over-month production gains came to an end in November. This was due to a number of factors according to the Director, NDIC. The two majors reasons: a) companies cutting back on fracking at end of year for cost control; and, b) weather.

Cost control: as the year came to an end, companies simply found they had spent their CAPEX for fracking for calendar year 2012.

Weather: Director, NDIC, considers weather to be the main reason why fracking was significantly decreased in November, and specifically the winter storm Brutus. "Williams County was impaced the most with November 10, 2012, being the snowiest day since 1901. The idle well count rose shaprly indicating an estimated 410 wells waiting on fracturing services."

MDW comments
  • with price of oil down for the month of November, maybe that was not so bad that production was held back (idle chatter; I don't really subscribe to that theory because most oil is sold by contract; prices hedged long before actual date of sale)
  • we may need to start comparing year-over-year production numbers (for example, November, 2012, with November, 2011), now that we're moving into the manufacturing phase, rather than consecutive month-over-month due to significant weather changes during some periods
Also, note the significant drop in leasing. This doesn't seem surprising. When I update the various oil fields, I note that more and more fields are entirely held by production. By the way, I would assume that if leasing is coming down, the Bakken-centric operators are starting to see a huge decrease in new lease expenses.
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2 comments:

  1. CRCJanuary 12, 2013 at 8:48 AM

    When the anti-hydrocarbon types at NPR and their Marxist intellectual fellow travelers get a hold of this reduction in production, they will sing the bust is coming. All that horizontal drilling into Mother natures earth and that awful fracking isn't all it was claimed to be. Mother earth is seeing to it and this will never succeed. The call will go out to stand with Mother earth and stop this hydrocarbon revolution.

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    Replies
    1. Bruce OksolJanuary 12, 2013 at 8:53 AM

      Yes, I already got one comment regarding that very subject. I did not post it. I did not want to embarrass Mr "Anonymous." In that particular case, Mr "Anonymous" misread the reason for the production numbers. Ironically it was due to the snowiest day in North Dakota since 1901 and all the fracking that had to be delayed. The decrease in production actually reveals how important fracking is. Shut down fracking for a few days and results are predictable. Now only is there the direct effect, but also the indirect effect, because the disruption in the schedule of fracking jobs snowballs.

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