Here are my thoughts, quickly done, needing to move on:
That would be correct, the boom is over. We are now in the manufacturing stage. The manufacturing stage was forecast about a year ago.Exciting, isn't it? Now, time to get back to the Bakken manufacturing stage. Did you all note that WPX was issued permits for seven wells on one pad today, something we never saw a year ago.
This is the neatest bit of trivia. Anyone who has a well in North Dakota (any mineral rights own) will eventually have four wells; some will have eight wells; a smaller number will have 16 wells, and maybe more. But when this all started, folks were happy if "their one well" came in. They had no idea, and some still do not yet realize, that they will eventually have 4, 8, 16 or more wells.
If the boom is over, I would say most North Dakotans would be thrilled; now to move into the even busier manufacturing stage.
For the record:
February 14, 2013:
- Permits to date: 322
- Projected # of permits for 2013: 2,612
- Projected # of permits for 2012 same time one year ago: 1,841
- Permits issued in 2012: 2,521 with 30 or so ultimately canceled.
ReplyDeleteMany of the statements laid out in the Atlantic showed that the author isn't very aware of the particulars of an oil boom.
First off, with construction, much of the initial construction was building huge complexes for Baker Hughes, Schlumberger, Halliburton, Nabors etc as well as railroad spurs, gas plants, pipelines etc. When that fell off, construction becomes more housing, retail, etc oriented.
Transportation needs are going down for liquids, as oil lines, water lines, water disposal lines etc are taking away some of the transportation requirements.
What's still coming are secondary idustries (refineries, ammonia plants, more gas plants, maybe proppant plants) as well as a huge pent up demand for better housing, retail, hospitals, services, that will have a ripple effect across the entire state. The frantic growth is gone, yes, but its ripple effects will carry through for years.
Agree completely.
DeleteI particularly enjoy the word "already"in the title/headline. One could argue the Bakken Boom began in Montana in 2000, although one could also argue it began in North Dakota in 2007 and really took off beginning in 2009 -- so as many as 13 years for this boom. And it "already" is over.
Regardless, this article will be a great marker.
How much of what we see and hear is now: "ho hum, another billion dollar day in the Bakken."
ReplyDeleteIt's not that the boom is over, it's that the bar is set so high to get our attention. Target Logistics sold for $625 million. Remember when you use to post about $5 million motels? You don't anymore because there is a new motel every week and its not a big deal anymore. I don't know how much play the Target deal got but, $625 million and 11,000 beds involved. That is every week in the Bakken.
I had some builders from Detroit in Fargo a couple of weeks back. In there drive around Fargo they saw more building then they see in all of Detroit, that was Fargo, imagine what they think when they went west to the Bakken?
So the boom isn't over, the bar is set so high. It will be a steady growth, not 10% growth, but maybe 5%, but its 5% growth on a much bigger base. So
let them mock our slow down.
Every other part of the country wished they had a fraction.
I agree completely. I was being somewhat facetious saying the boom was over and we were moving into the manufacturing phase.
DeleteIt is accurate that we are moving into the manufacturing phase, and you are so correct: the multi-million dollar deals continue.
Also: one well used to cost a driller $10 million (plus or minus). Now they are putting in 7-well pads ($60 million projects).
The "Atlantic" article will be interesting to use as a "marker" going forward.
The other piece missed: how much the Bakken was the laboratory providing lessons learned which are now being put to good use in the Eagle Ford, Niobrara, Mississippi Lime, Uinta, etc.