An earlier post has been updated to include a link to an EIA pdf that was inadvertently omitted. The link to a pdf: https://www.eia.gov/petroleum/drilling/pdf/January_2021_Supplement.pdf.
Screenshot of the title page (archived):
From the report:
After June 2020, crude oil production in North Dakota has been recovering, but it is still about 20% lower than the historical high in October 2019.
Although the base production (production from wells more than one year old) has fully recovered, the swing production (production from wells less than a year old) has not because a lower rate of new well completions has resulted in fewer new wells.
Very interesting report.
ReplyDeleteAssuming DAPL does not get closed, AND WTI stays above 50, I would think ND can stabilize production in the low 1s. Have to watch rig count in the spring.
Watch DAPL though. What matters is local prices. If the diffs get too large, it doesn't matter that WTI is attractive. Just ask the Marcellus producers, how that can feel.
You are correct. I think the DAPL carries about 50% of total Bakken production. I don't know; could be wrong. However, there are some operators that don't use the DAPL at all, so, again, as usual, the devil is in the details.
DeleteRight, but 50% is a lot. If that oil has to go get on a Buffet train, it will cost more. People drilling the marginal wells are looking at the marginal price. And it is the marginal production that drives growth or shrinking. So, if you're interested in cheerleading overall production (rather than individual companies with locked in transport), you do care about the local ND price.
ReplyDeleteAgain, same thing has played out in the Marcellus. Sure some companies have speculated on locking in transport (which can bite you in the ass when prices drop). But what matters for the region overall is local spot price.
All that said, I am hopeful that DAPL survives. If it doesn't, it will be a major shock.
Agree completely. But my whole outlook on all of this has changed immensely. Regardless, I remain inappropriately exuberant about the Bakken.
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