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Friday, February 23, 2024

North Dakota Oil Production -- Annual -- 2019 - 2023 -- Returning To A Reader's Question Of Some Weeks Ago

Locator: 46883B.

Link here. From NDIC data here.

Full year, oil production:

  • 2019: 524,430,647 bbls crude oil
  • 2020: 438,683,034
  • 2021: 409, 104,098
  • 2022: 390,326,798
  • 2023: 435,013,847

Average amount of oil per well per day:

  • 2019: 93.17 bbls crude oil per day per well
  • 2020: 81.09
  • 2021: 68.75
  • 2022: 63.33
  • 2023: 67.33
Number of producing wells, at the end of the year:
  • 2019: 15,656
  • 2020: 15,384
  • 2021: 16,829
  • 2022: 16,874
  • 2023: 18,365

Best year of the five years:

  • 2019: 524,430,647 bbls for the year

2022 was atrocious, averaging 1,069,388 bopd:

2023, last year, averaging 1,191,819 bopd, an 11% increase over 2022.


Several weeks ago a reader asked what explains the jump in production year-over-year.

That's really two questions:

  • why did production increase year-over-year; and,
  • how did operators manage to increase production year-over-year in the Bakken.

So, to answer the first question, the "why." It's all about managing assets, something we've discussed before.

Second, "production follows price."

So, now the how? All things being equal, how did operators increase production? Two parts to the answer to that question:

  • first, they only had to open the choke (open the spigots) and hope takeaway capacity was there (it was); and,
  • second, to keep the open spigots flowing at an increased rate:
    • hope for good weather, so drilling and fracking could proceed, based on the operator's schedule; 

But what was the secret sauce?

  • complete the DUCs.

Let's check that out.

Assumption:

  • the number of active rigs has not changed: and that's true, running between 36 and 39 rigs for quite some time;
  • the weather held, for the most part, and the drilling stayed on schedule; and,
  • finally, the operators started completing DUCs.

Check this post.

DUC inventory:

  • December, 2020:   811
  • December, 2021:   555
  • December, 2022:   602
  • December, 2023:   324

There seems to be a trend.

By the way, 800 DUC-inventory has been the norm for years in the Bakken, so even a drop to 555 was noteworthy, but look at that "324."

That leads to the next question ... what makes the Bakken so special to be able to frack so fast .. but for another time ...

There are a number of other Bakken-specific reasons for increased production but that's enough for now.

But the real shout-out goes to the blue-collar workers in their Carhartt Clothes: the truckers; the roughnecks.

11 comments:

  1. Have you ever pondered how quickly Marathon fracks their wells? Seems they jump on it like a "duck on a june bug" once the drilling rigs move on. Makes sense to me, "payday is on Friday" and they don't seem to screw around...

    ReplyDelete
    Replies
    1. Yes, that's why I have so many "MRO" tags including "MRO_Refracking" and "MRO_Inventory," and spend so much time on the Bailey oil field. Different business plans by different operators. At the other end of the spectrum, BR.

      Delete
  2. Don't understand BR's approach. A well drilled is a "sunk cost"; seems to me that the sooner a well is fracked the sooner the costs are recovered and profits are booked. But... what do I know? Bupkis!

    ReplyDelete
    Replies
    1. I've thought about that for many years -- I guess decades -- when I first noted the different strategies. I can think of at least two reasons why BR does it their way -- and those who have farmed wheat in North Dakota should know that reason. And then there's a possible geologic reason. Won't discuss further because I don't want the pushback or thought a fool. LOL. But I know I'm right.

      Delete
  3. I've long been amazed at the logistics involved here. Must have a bunch of folk with a military background to pull this caper off on a consistent basis. Color me "impressed"!

    ReplyDelete
    Replies
    1. They're either all engineers or they all think like engineers.

      Delete
  4. Now you reason an interesting observation regarding farmed wheat in ND. My father-in-law liked to rail on those "Wall Street Thieves" and considered himself a conservative farmer. He'd harvest his crop, put in the granary and sell when he thought the price was optimal. He never realized that (like those Wall Street Thieves) the minute he put his harvest into the granary he ceased to be a farmer and became a commodity speculator!
    Burlington Resources must have the same might set, eh? The difference is that BR knows what they are doing and are willing to take the chance...

    ReplyDelete
    Replies
    1. And BR doesn't have the expense of building silos; or going through the expense of a co-op / middle man; or insuring their product; etc. etc. And with deep pockets, they are not taking the chance individual farmers would be taking.

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  5. You got it! I think most ND farmers think when they stash the harvest in the grannary they are being conservative. Fact is, they are crazy speculators that would drive most investors wild. I love it!!

    ReplyDelete

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