"They Didn't Build It" -- December 30, 2014

Disclaimer: an op-ed. Just an opinion. Nothing more, nothing less. Numbers rounded. This and $1.89 will get you a cup of Starbucks coffee. 

I doubt anyone cares; it's just a number, but I think it's pretty remarkable: 3,000 oil and gas permits in 2014. The boom was supposed to have ended two years ago according to The Atlantic Monthly.

• The Atlantic Monthly asks (back on Feb 12, 2013 ) whether the "miraculous" ND boom is ALREADY over?
• even if the boom is over, there's a lot of work yet to do

Whatever.

3,000 permits in 2014. I thought last year was supposed to be the big year. I thought the year before that was supposed to be the peak of the boom. And the year before that? Every year, until this year: about 2,000 permits.

This year: 3,000 permits.

That's a 50% increase in the number of permits. You can argue the effect the price of oil had either way -- either it affected the number of permits or it didn't. The price of oil started to slide in June, 2014, which was more than enough time for permits to drop off; they didn't drop off (in fact, they surged in October, November, December).

Or you can argue that the real plunge in the price of oil began after the OPEC meeting at the end of November, clearly not enough time to make a huge effect on the total number of permits this year. So, say what you want. I think 3,000 permits -- for a 30-second sound bite, almost 50% more than each of the previous three years -- is pretty remarkable. For newbies: permits are only issued by the NDIC if "they" think the operator has the capability of drilling those wells in the "near future," which generally means in the next 6 to 12 months.

And remember, the drilling is much more effective in 2014 than it was in 2011. I've discussed this before; won't go through it again.

Of course, if you told some folks in Washington, DC, that North Dakota did that much work in one year, I'm sure we would get ....

They Didn't Build That
By the way, what a great way to finish the year with regard to Statoil IPs. Did you all see this in today's daily activity report:

• 26155, 4,076, Johnston 7-6 6H, Banks, t11/14; cum --
• 26156, 3,657, Johnston 7-6 5TFH, Banks, t11/14; cum -- 

Disclaimer: if you feel IPs mean squat, ignore the last couple of bullets.