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Sunday, December 27, 2015

Are Bakken DUCs A Big Deal? -- December 27, 2015

Disclaimer: in a long note like this, there will be typographical and factual errors. If this information is important to you, go to the source.

A couple of days ago I posted a poll asking whether "Bakken DUCs are a big deal?"

I had planned to write about DUCs awhile ago but have decided to put that discussion off. I feel I need at least one more month of data -- which we won't get until mid-January, 2016, when the next Director's Cut comes out, with the November, 2015. Production data should be available prior to the publication of the Director's Cut.

At that post I linked a New York Times article on DUCs.

Today, I'm just going to post some observations, keeping comments to a minimum:

Worksheet (explanation below the worksheet):

Month/Year
Producing Wells
Delta
Average
Bbls/Well
Average
Active Rigs
January 2013
5166
118

4048



5318
152

3775



5469
151

4093



5621
152

3883



5738
117

4034



5900
162

3860



6108
208

4111



6308
200

4166



6455
147

4040



6657
202

4099



6790
133
158
4034


December 2013
6840
50
149
3925
4006
187
January 2014
6944
104

3905



7066
122

3527



7250
184

3906



7469
219

3771



7685
216

3934



7868
183

3919



8064
196

4040



8289
225

3994



8500
231

3951



8620
120

4021


November 2014
8730
110

3864



8947
217
177
4032
3905
173
January 2015
9051
104

3865



9168
117

3412



9421
253

3716



9529
108

3492



9709
180

3645



9912
203

3489



10044
132

3549


August 2015
10115
71

3466



10158
43

3268



10298
140
135
3353
3526
62


This table includes only Bakken wells in North Dakota as defined by the NDIC 
  • The most recent data available is October, 2015
  • I believe the NDIC announced the one-year extension to complete wells was in November, 2014
  • As of October, 2015, there were 10,298 Bakken producing wells 
  • There are currently about 10,500 producing Bakken wells
  • Average production per well, in round numbers, column 6:
  • in 2013, Bakken wells produced on average 4,000 bbls/month
  • in 2014, Bakken wells produced on average 3,900 bbls/month
  • for most of 2015, Bakken wells averaged 3,500 bbls/month
  • Average change in number of Bakken wells month-over-month, column 4: 
  • 2013: 149
  • 2014: 177
  • 2015 to date: 135
The change in the number of producing wells is a combination of new wells coming on line (including previous wells taken off-line for some reason) and older wells being taken off-line. 

Note: in column 4, the averages are for the calendar year. For 2013, there are two averages provided. For the first 11 months, the average change in the number of wells month-over-month was 158 (December, with only 50 new wells was an anomaly, so I wanted to see the average without December's data; the average for the year -- all 12 months, including December -- was 149 more wells on average month-over-month).

When looking at the monthly production/well, remember this incredibly important point: in 2013, they were drilling across the entire Bakken. In 2015, drilling had shifted to the best spots in the Bakken. Average production has decreased about 500 bbls/month/well in 2015 compared to 2013.

Some other observations:
  • in 2013, when they were drilling "all-out," the average number of producing wells increased by about 150 wells month-over-month; the number of active rigs: 180
  • in 2015, when the severe plunge in the price of crude oil had continued, the average number of producing wells increased by about 135; the number of active rigs: 65
  • when one throws out the two anomalous months in 2015 (August and September), the average number of producing wells increased by about 155 wells month-over-month
Disclaimer: in a long note like this I may have made simple arithmetic errors. In addition, there may have been errors in transcribing data from the NDIC source to my worksheet. If mistakes are noted, they will be corrected. Do not use this information if this is important for you. If this is important for you, go to the source.

So, maybe one can add this information to the question whether DUCs are a big deal.

By the way, here's another look at DUCs. Take a look at Robinson oil field, a fairly active field over the past few years. The data goes back to 2010, and the list is up-to-date (although total production for all wells has not been updated).

One can quickly scroll down the list. IPs in bold blue are wells that are currently DUCs or were DUCs at one time, and have since been completed. Some DUCs will have been missed. When next month's data comes out, some (many? most?) of the wells currently on conf status will go to DUC status.

You might note the Sinclair well back in 2013 that is a DUC. What gives? 2013 was well before the November, 2014, date when an extension for well completion was approved. That Sinclair well was permitted in 2013, but was not spud until February 2, 2015; it reached total depth February 27, 2015, but it is now a DUC (has not been fracked). This will be a good well to follow. Although it is on DUC status, it will be interesting to see if the well is completed within a year of spud (February, 2016); if not, how soon after.

Another active field one can look at is MRO's Bailey field to get a feel of the prevalence of DUCs. 

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