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

January 13, 2013: The Minot Press has a story on the drop in production. 

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.