How Good Are The Drillers These Days? -- November 17, 2015

In a Bloomberg/Rigzone article linked earlier today, this was reported:

Oil production in the Permian is forecast to rise 0.6 percent in December to 2.02 million barrels a day, even as drillers have idled 59 percent of the rigs there in the past year. Output in rival shale fields like the Bakken and Eagle Ford has fallen 12% and 25%, respectively, as drillers pulled out after oil prices crashed last year.

North Dakota has gone from 200 rigs to 60 rigs --

• 60 rigs represents about 30% off the high
• 70% of 200 = 140 -- the number of rigs lost since the high

So, I suppose one could say that there has been a lot of 70% of rigs and yet the amount of production has held up:

• September, 2015:  1,162,253 (preliminary)
• August, 2015: 1,187,631 (final, revised)
• July, 2015: 1,206,996 (final, revised) 
• June, 2015: 1,211,328 (final)(second highest; highest was December, 2014)
• May, 2015: 1,202,615 (final)
• 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)

But it's more than just the number / the percent of rigs laid down. The 60 rigs are drilling to depth but the wells are not being completed; they are being shut in; the operators will come back later to complete / frack them. The wells that have been completed and are producing are seeing producers hold back production at these low prices.

At the risk of beating a dead horse:

I think this is the most under-talked about story in the Bakken right now, the fracklog. Everyone is concentrating on the "number," when, in fact, that's just a small part of the overall story. Here some things to keep in mind when thinking about these 1,000+ wells waiting to be fracked:

• they are all in the sweet spots of the Bakken
• operators have spent 7+ years perfecting completion techniques, resulting in huge 90-day production, and then 1-year production profiles
• every well in the Bakken -- especially in the sweet spots -- will create a halo effect on neighboring wells 
• the infrastructure is most robust in the sweet spots of the Bakken
• 3 - 5 days to frack; once decision is made to frack, oil will moving fairly quickly after that