The Red Queen Is Still On The Treadmill; She Has Not Fallen Off; North Dakota Oil Production Increases Month-Over-Month, May, 2015, Data

Director's Cut is out. This is May, 2015, data. 

The Bismarck Tribune has the story here but nothing in the story that wasn't in the data below.

I track the "cuts" here. 

Disclaimer: this update is always done in haste; typographical and factual errors are likely. This is for my use only. If this is important to you, you should go to the source. 

Note: facts and opinions are interspersed in the note below. Do not make any investment or financial decisions based on what is posted below; there will be factual and typographical errors. If this information is important to you, go to the source. 

The May data is posted at this link: https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2015-07-10.pdf.

Important data points:

• Bakken price in June: $47.73
• Fracklog: 925 (no change); I had thought it would have been closer to 1,000
• Completions: 114 (up slightly from 102 in April) -- a very, very low number; many wells going to SI/NC status
• To maintain production near 1.2 million bopd: 110 - 120 completions needed each month
• Statewide flaring: 18% 

Delta, crude oil production:

• 1,201,159 - 1,169,045 = 32,114 bopd
• 21,866 / 1,168,636 = 2.7% increase month-over-month

Oil:

• May, 2015: 1,201,159 (preliminary)
• April, 2015: 1,169,045 (final)
• March, 2015: 1,190,502 (final); 1,190,582 bopd (preliminary)
• February, 2015: 1,178,082 bopd (revised, final); 1,177,094 (preliminary)
• January, 2015: 1,191,198 bopd (all time high was last month)
• December, 2014: revised, 1,227,483 bopd (preliminary - 1,227,344 bopd - preliminary, new all-time high)
• delta: see above

Producing wells: 

• May, 2015: 12,659 (preliminary -- new all-time high)
• April, 2015: 12,545 (final revised -- new all-time high)
• March, 2015: 12,443 (final revised -- new all-time high)
• February, 2015: 12,199 (final revised -- new all-time high)
• January, 2015: 12,181 (preliminary -- new all-time high)
• December, 2014: 12,134 (preliminary, new all-time high)
• November, 2014: 11,951 (revised); 11,942 (preliminary, new all-time high)
• October, 2014: 11,892; revised 11,942 (preliminary, new all-time high)
• September, 2014: 11,758 (revised); 11,741 (preliminary; new all-time high)
• August, 2014: 11,565

Permitting: drilling permit activity decreased slightly from April to May and then increased back to February-March levels in June as as operators positioned themselves for low 2015 price scenarios and a significant inventory should a return to drilling price point occur in the next 6 - 12 months.

• June, 2015: 168
• May, 2015: 150
• April, 2015: 168
• March, 2015: 190
• February, 2015: 197
• January, 2015: 246
• December, 2014: 251
• November, 2014: 235
• October, 2014: 328
• September, 2014: 261
• August, 2014: 273
• All-time high was 370 in 10/2012
  

Pricing:

• Today, 2015: $40.75 
• June, 2015: 47.73
• May, 2015: $44.70
• April, 2015: $38.33; $36.25 (lowest since February, 2009, and January, 2015) (all-time high was $136.29 7/3/2008)
• March, 2015: $31.47
• February, 2015: $34.11
• January, 2015: $31.41
• December, 2014: $40.74
• November, 2014: $60.61
• October, 2014: $68.94
• Sept, 2014: $74.85
• August, 2014: $78.46

Rig count:

• Today: 73 - lowest since November, 2009, when it was 63 (all time high was 218 on 5/29/2012)
• June: 78
• May: 83
• April: 91 (lowest since January 2010)
• March: 108
• February: 133
• January: 160
• December, 2014: 181
• November, 2014: 188
• October, 2014: 191
• Sept, 2014: 193
• August, 2014: 193
• July, 2014:  192

Director's comments:

Operators continue to experiment with running 1 to 2 fewer rigs than their planned 2015 minimum to see if drill times and efficiencies will continue to improve. This has resulted in a current fig count that is 5 to 8 rigs below what operators indicated would be their 2015 average if oil price remained below $65/bbl. The number of well completions dropped sharply from 244 (final) in March to 102 (final) in April. The number of completions rose slightly to 114 (preliminary) in May.

Even with the decrease in drilling activity, initial production rates are increasing 10 - 20% per month as drilling and completions focus more and more on the best ortion of the core Bakken and Three Forks area.

Drilling rig count:

• has since dropped another 5 from June to today
• dropped 5 more from May to June
• dropped 8 from April to May
• dropped 17 from March to April 8
• dropped 25 February to March
• dropped 27 from January to February
• dropped 7 from November to December
• dropped 21 from December to January
• dropped 23 from January to date of previous month's Director's Cut

Rig utilization:

• no change
• 20,000+ feet rigs: 45% 
• shallow well rigs: 25% 

Well completions:

• May: 114 (preliminary)
• April: 102 (final -- astounding drop)
• March: an astounding 194 (final)
• February: 42
• January: 63
• December: 173 (preliminary)
• November: 48

Weather:

• one significant precipitation event in Dickinson and Williston
• 7 days with wind speeds in excess of 35 mph (too high for completion work)
• no days with temperatures below -10F

Wells waiting to be completed:

• At end of May, an estimated 925 wells were waiting to be completed, no change
• At end of April, an estimated 925 wells were waiting to be completed, an increase of 45
• At end of March, an estimated 880 wells were waiting to be completed, a decrease of 20
• At end of February, an estimated 900 wells waiting to be completed, an increase of 75
• March, 2015, Director's Cut -- 825 wells -- an increase of 75-- January data
• Previous Director's Cut -- 750, a decrease of 25
• Red Queen: 110 - 120 completions per month to maintain 1.2 million bopd

Flaring:

• unchanged at 18%
• finally, the Tioga gas plant was up significatnly to 93% of capacity
• expansion of gas gathering from south of Lake Sakakawea is still delayed

Gas capture statistics:

• statewide: 83% (October 2014 target was 74%; January 2015 capture target is 77%)
• FBIR Bakken: 88% (88% previous month; 83% last month; 79% before that; 77% the month before)
• percent of flaring was unchanged; the volume of flaring increased 23.5 MMCFD (a reversal from last month when flaring had decreased month-over-month)

Fracking policies/regulations:

BLM revised final regulations for hydraulic fracturing on federal and Indian lands were published in the CFR on 3/26/15 so they will go into effect 6/26/15. North Dakota and Colorado have intervened in the Wyoming legal challenge of the rules a nd plan to seek an injunction or temporary restraining order to prevent the rules going into effect until the case is settled.

Natural gas exploration in Emmons County:

The exploration well is no longer on confidential status as of 12/23/14; the well has not been completed yet, but appears to contain 2 pay sections totaling about 80 feet thick with very good gas shows