Breakdown Of Oil & Gas Permits Issued By NDIC In CY2019

Permits, #35899 - #37295, inclusive

Total number of permits issued in calendar year, 2019: 1,397 oil and gas permits.

By operator:

• BR: 90
• Bruin: 43
• CLR: 187
• Enerplus: 57
• EOG: 19
• Equinor: 37
• Hess: 164
• Kraken: 46
• MRO: 102
• Newfield: 42
• Nine Point: 21
• Oasis: 23
• RimRock: 67
• Slawson: 57
• Whiting: 105
• WPX: 64
• XTO: 122
• Zavanna: 20

By county, not all counties are listed:

• Dunn: 320
• McKenzie: 454
• Mountrail: 264
• Williams: 328
• Total from those four counties: 1,377

By field, not all fields are listed:

• Alger: 10
• Alkali Creek: 33
• Antelope: 24
• Bailey: 13
• Baker: 8
• Banks: 36
• Bear Den: 11
• Beaver Lodge: 33
• Big Bend: 43
• Big Butte: 13
• Blue Buttes: 12
• Capa: 26
• Charlson: 11
• Chimney Butte: 14
• Clarks Creek: 9
• Eagle Nest: 29
• East Fork: 16
• Elidah: 22
• Elm Tree: 18
• Haystack Butte: 38
• Heart Butte: 54
• Killdeer: 21
• Lone Tree Lake: 18
• Long Creek: 50
• Mandaree: 34
• Manitou: 16
• McGregory Buttes: 16
• Moccasin Creek: 18
• Murphy Creek: 13
• North Fork: 19
• Oliver: 17
• Parshall: 11
• Pershing: 19
• Poe: 9
• Reunion Bay: 31
• Sand Creek: 18
• Sanish: 83
• Siverston: 29
• South Fork: 26
• South Tobacco Garden: 27
• Spotted Horn: 12
• Squaw Creek: 32
• Stony Creek: 11
• Tioga: 28
• Wildcat: 5

Third Lowest Number Of Permits Issued In A Calendar Year In Nine Years -- December 31, 2019

Updates

January 1, 2019: in the original post I was going to note that despite low number of permits and low number of active rigs, production is setting all-time records. It was great to see that a reader did that for me. See comments. I've brought the comment up here for easier access:

EIA 914 shows another record for US (October, 2019, monthly production): 12.66 MM bopd. And that's with 0.1 MM bopd still to return from GOM outages.

https://www.eia.gov/petroleum/production/ 

It will be very, very close, but I'm still seeing a chance that we will finish 2019 (December, 2019, monthly data) with a 13-million-bopd in production.

Record natgas also: 

https://www.eia.gov/petroleum/production/#ng-tab 

Natural gas production is comfortably over 100 BCF/d total withdrawals, lower 48, at 105.1 BCF/d. (I don't count Alaska production since it is just reinjected.)

ND showing over 3 BCF/d. 

LA just popped over 9 BCF/d and is a hair away from breaking its November, 2011, record.

The peak oil/gas folks have been reduced to saying growth is "too slow" or "about to turn" since they've been boot-stomped by actual production, hitting new records almost every month.  

Search on the blog: "doofus-in-chief."

Original Post

It looks like the last time I estimated the number of oil and gas permits issued by the NDIC for calendar year 2019 was posted on October 8, 2019. At that time, this is what I posted:
Projection: Based on the number of permits in each of the following months, the number in bold was the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,582 permits would be issued for calendar year 2019.

• January, 2019: 1,495
• February, 2019: 1,434
• March, 2019: 1,578
• April, 2019: 1,582
• May, 2019: 1,660
• June, 2019:  1,557
• July, 2019: 1,671
• August, 2019: 1,495
• September, 2019: 1,107
• first 8 days of October, 2019: 1,688  

So, how did that turn out?

Total number of NDIC oil and gas permits: 1,397.

At this post, dated  June 22, 2019, the number of permits by calendar year and the projected number of permits at that time for calendar year, 2019, with the new number added:

• 2019, 1,397
• 2018: 1,466
• 2017: 1,189
• 2016: 818
• 2015: 2,055
• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011:1,916 

There were only two years in which fewer permits were issued.

I'll have a breakdown of the permits by operator, field, etc., later.

Projected Number Of Permits To Be Issued For Calendar Year 2019 In North Dakota (99% Bakken): Fifteen Hundred -- October 9, 2019

Re-posting: original post and additional background and comments at this link. 

2019 Permitting In North Dakota 

99% Bakken 

Projection: Based on the number of permits in each of the following months, the number in bold was the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,582 permits would be issued for calendar year 2019.

• January, 2019: 1,495
• February, 2019: 1,434
• March, 2019: 1,578
• April, 2019: 1,582
• May, 2019: 1,660
• June, 2019:  1,557
• July, 2019: 1,671
• August, 2019: 1,495
• September, 2019: 1,107 
• October, 2019: 1,484
• November, 2019: pending

One can compare the above projections with the actual number of permits issued in North Dakota over the past several years at this site:

• 2019 (estimate, as of November 16, 2019): 1,466
• 2017: 1,189
• 2016: 818 (price of oil tanked due to Saudi opening their spigots)
• 2015: 2,055
• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011: 1,916

A Random Update Of Permits In The Bakken So Far This Calendar Year -- October 8, 2019

2019 Permitting In North Dakota 

99% Bakken 

Projection: Based on the number of permits in each of the following months, the number in bold was the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,582 permits would be issued for calendar year 2019.

• January, 2019: 1,495
• February, 2019: 1,434
• March, 2019: 1,578
• April, 2019: 1,582
• May, 2019: 1,660
• June, 2019:  1,557
• July, 2019: 1,671
• August, 2019: 1,495
• September, 2019: 1,107
• first 8 days of October, 2019: 1,688 

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Original Post

 
Disclaimer: I did this quickly. There will be factual / typographic errors. The numbers were counted quickly and may be "off" by two or three at the most, good enough for government work.

To date, for 2019, there have been 1,162 oil and gas permits which extrapolates to 1,509 for the year which is about average for a "good" year in the Bakken.

Of the 1,162 permits, this is how some of the numbers play out:

Company	As Of October 8, 2019
CLR	159
Hess	125
XTO	118
Whiting	82
BR	79
MRO	71
RimRock	65
Enerplus	57
WPX	52
Kraken	45
Slawson	44
Equinor	32
Bruin	29
EOG	14

CLR, not unexpectedly led at 159 permits. I was surprised to see Hess at #2 and pretty much in the same ballpark with 125 permits, and then even XTO. After that it drops off fairly quickly.

******************************************

More On Permitting

See this post.The update:

Projected Number of Permits for Calendar Year 2019

For the number of days in the calculations below, I'm using "number of days" through Sunday, July 14, 2019, this weekend.

It's possible I have made simple arithmetic errors.

The number of permits issued each month by the NDIC may differ from what I have in my database, but if so, it will be very, very close, and won't affect the overall results.

Based on the number of permits in each of the following months, the number in bold is the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,578 permits would be issued for calendar year 2019.

• January, 2019: 1,495
• February, 2019: 1,434
• March, 2019: 1,578
• April, 2019: 1,582
• May, 2019: 1,660
• June, 2019:  1,557
• July, 2019: 1,671
• August, 2019: 1,495
• September, 2019: 1,107
• first 8 days of October, 2019: 1,688 
  

Based on the number of permits issued for the first calendar quarter of 2019, the number in bold is the projected number of permits that would have been issued for the entire calendar year had the rate been the same as that for the corresponding quarter. In other words, based on the number of permits issued in 1Q19, there would be 1,497 permits issued for the entire calendar year had that rate remained throughout the year.

• 1Q19: 1,497
• 2Q19: 1,071
• 3Q19: 1,428

I've checked this several times and I believe the numbers are accurate.

One can check the above projections with the actual number of permits issued in North Dakota over the past several years at this site:

• 2019 (estimate): 1,497
• 2018: 1,466
• 2017: 1,189
• 2016: 818 (price of oil tanked due to Saudi opening their spigots)
• 2015: 2,055
• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011: 1,916

For newbies:

• North Dakota regulators generally approve permit applications in about 30 days
• permit applications should not be affected by the weather unless there is a lot of site visitation of which I am unaware, but certainly the 1,071 permits projected based on 2Q19 vs the 1,497 permits projected based on 1Q19 appears to validate that assumption; in ND, Jan-Feb-Mar are severe winter months; whereas Apr-May-Jun are much better weather months
• a permit is "good" for one year, but is easily renewed

My hunch:

• most operators determine CAPEX, number of rigs, permit applications, etc, six to twelve months prior to execution
• CAPEX is adjusted semi-annually when things are going well; quarterly when things seem a bit more bleak; and monthly, when things are going to hell in a handbasket
• the number of rigs and frack spreads correlate directly with CAPEX
• permit applications may or may not correlate with CAPEX; I don't know
• I would think operators would have a stack of permits in the hopper in draft status/nearly complete well in advance of submission; 
• it appears NDIC can issue as many as 20 or more permits in one day based on historical data; in other words, it's not the NDIC holding things back once operators decide to proceed (obviously the NDIC is not accomplishing the entire process in one day, but the point is that the number of permits issued in one day does not appear to be capped by the regulator)

Thesis:

• the weekly rig count, week-over-week, is meaningless in the Bakken
• the monthly rig count, month-over-month, may be slightly more meaningful than the weekly change
• the monthly permitting activity gives one a much better idea of future activity (and dare we say, production?) in the Bakken

If I could only choose one metric to follow the Bakken, it would be the rate of change (increase/decrease) in number of permits on a monthly basis. 

Having said that, even the number of permits issued each year is coming down, and production continues to rise.

Most Recent Legacy Fund Deposits Reported; CLR With Eight More Permits For The Long Creek Unit; A Milestone Of Sorts: Permit #37000 Issued -- September 23, 2019

Legacy fund deposit for September, 2019 (link here):

Note: the September, 2019, deposit exceeds the average of every calendar year since and including calendar year 2011 except for years 2013 and 2014.

**************************************

Daily Activity Report

Active rigs:

$58.47	9/23/2019	09/23/2018	09/23/2017	09/23/2016	09/23/2015
Active Rigs	59	66	57	33	69

Eight new permits, #36995 - #37002, inclusive:

• Operator: CLR
• Field: Long Creek (Williams)
• Comments: 
• CLR has permits for eight more wells in the Long Creek Unit; four new Ralph Federal permits; and, four new Reckitt Federal permits; the Long Creek Unit is tracked here; with these eight, it appears CLR has about 38 active permits; goal: 60 wells in this unit to be drilled with two rigs;

Four permits renewed:

• EOG (3): three Austin permits in Mountrail County
• Liberty Resources: a Keller permit in Burke County

Three producing wells (DUCs) reported as completed:

• 35824, 1,483, CLR, Gjorven Federal 6-21H, Brooklyn, t9/19; cum --; one of my favorite fields, the Brooklyn oil field is tracked here;
  
• 31806, 1,316, EOG, Riverview 24-3031H, Clarks Creek, t8/19; cum --; #22199, #22200 -- both offline since 2/19; #22486, #22487 both off line since 5/19; #19247 just coming back on line;
  
• 34289, 158 (no typo), FBIR Walker 31X-36HXE, Heart Butte, t6/19; cum --; numerous neighboring wells off line;
  

Notes From All Over, Part 1 -- August 29, 2019

Wow, it already feels like Friday.

But we will press on.

**************************************

Ethanol

EIA: US ethanol plant nameplate capacity up in 2019. Link here. Data points:

• US with about 200 operational ethanol plants
• spread across the US
• increase in capacity year-over-year was 326 million gallons (per year)
• 16.542 billion gallons in 2018
• 16.868 billion gallons in 2018
• percent increase, year-over-year: 2%

US gasoline demand, year-over--year. Link here.

• this year four-week average, 08/23/19: 9.777 million bbls/day
• last year (2018) four-week average, 08/24/18: 9.553 million bbls/day
• year-over-year increase: 2%

*****************************

Japanese Beef

A reminder for me. Wagyu beef was on the menu at local restaurant we visited yesterday; I keep forgetting "definition" of wagyu. From wiki:

Wagyu is any of the four Japanese breeds of beef cattle. In several areas of Japan, wagyu beef is shipped carrying area names. Some examples are Matsusaka beef, Kobe beef, Yonezawa beef, Mishima beef, Ōmi beef, and Sanda beef. 

In recent years, wagyu beef has increased in fat percentage due to decrease in grazing and an increase in using feed, resulting in larger, fattier cattle.

***************************************
Recession Fears

Overblown. The Wall Street Journal. 

The yield curve is upside down, leading to worry about recession. Stocks declined last week after the 10-year Treasury yield fell below the two-year Treasury yield. Yet while an inversion of the yield curve has preceded all postwar recessions, not all inversions signal imminent recession. The curve was flat for most of the 1990s, and even inverted briefly in 1998, without a recession. Today, given the economy’s underlying strength, fears of immediate recession are overblown.

U.S. gross domestic product grew 2.1% in the second quarter, and the Atlanta Federal Reserve forecasts 2.2% annualized third-quarter growth. The generally accepted definition of a recession is two consecutive quarters of negative GDP growth. GDP consists of four components: consumption, government spending, net exports and business investment.

It should be noted that the mainstream media has a new definition of recession: GDP trending to less than whatever "they" want the GDP to be. Their definition of "recession" does not need to be:

• rigorous
• accurate
• based on generally accepted criteria
• based on negative GDP growth
• based on any period greater than a day

I posted this mostly to note the generally accepted definition because one knows that will change over the next 24 months.

On another note, like the states, my hunch is that there will be winners and losers in the global economy.

Reminds me of the joke about two hikers in the wood confronted by an angry bear. 

A few "facts" from the linked article:

Consumption looks strong.

Through July, retail sales have increased this year, consumer confidence has rebounded, and productivity—output per hour worked—has experienced some of the largest increases in decades.

When a recession occurs, weekly unemployment claims are first to tick up. They aren’t rising, and there are more openings than unemployed people. Given this labor-market strength, an increase in consumer spending—which accounted for 68% of GDP in 2018—is far likelier than a decrease.

Government spending accounted for 18% of GDP in 2018 and grew 3% during the first half of 2019 amid growing deficits. Net exports reduced last year’s GDP by 3.3%, down to 3.1% so far this year.

Today's jobless report, pending:

• prior: 209K
• revised: 211K
• consensus: 213K
• actual: 215K

**********************************

Closing The Loop

A reader recently pointed out, with regard to oil and gas permits in North Dakota:

• permits > spuds (brilliant)
• PNC (canceled permits significantly greater than 1%): accurate 
• permits: cheap and easy (tells me all I need to know about the source). Permits are neither "cheap" nor "easy." I assume the cost to prepare a greenfield oil and gas permit application runs into the hundreds of thousands of dollars. I wouldn't even know where to begin if I were tasked with preparing a permit.

Fourteen Permits Renewed; Nine New Permits; Seven DUCs Completed; And, A Pronghorn In A Wheat Field -- July 12, 2019

Note: some good comments from a reader in the comment section below. I accidentally deleted one of the reader's comments but was able to copy it and post it as coming from me. It is noted in the comments below that that particular comment is from the reader although it is published by me. Sorry about that. 

Original Post

US equity markets. At the close, going into a weekend when anything can happen:

• S&P 500 surges: gains almost 14 points to close at an all-time high of 3,014
• DOW surges: gains almost 244 points to close at an all-time high of 27,332 (day before Trump appears to have more electoral votes than Hillary: 18,259; that's a 49% gain since November 8, 2016)
• NASDAQ: gains 48 points to close at 8,244

Shopping: I will buy Sophia a new pair of shoes over the weekend.

***********************************

Back to the Bakken

Royalties: ND Supreme Court sides with state in suit between state and Encana/Newfield over deductions from natural gas royalties.

Active rigs:

$60.27	7/12/2019	07/12/2018	07/12/2017	07/12/2016	07/12/2015
Active Rigs	56	67	58	28	73

Nine new permits, #36726 - #36734, inclusive:

• Operators: CLR (8), WPX (1)
• Fields: Siverston (McKenzie County), Little Knife (Dunn County), South Fork (Dunn County)
• Comments:
• CLR has permits for a 5-well Vardon pad in section 14-150-97, Siverston oil field
• CLR has permits for a 3-well Marshall pad in section 24-145-97, Little Knife oil field
• WPX has a permit for a single Skunk Creek well in lot 2 / section 1-1-48-93; South Fork oil field

Fourteen permits renewed:

• XTO (7): seven Prairie Federal permits in McKenzie County
• Petro-Hunt (6): twoArsenal Federal permits; two Eric Stratton Federal permits, and two Mongoose permits, all in McKenzie County
• Hunt: an Oakland permit in Mountrail County

Seven producing wells (DUCs) reported as completed:

• 34559, 83, XTO, Bobcat Federal 11X-2F2-S, Bear Creek, t5/19; cum --; neighboring wells include #18112 (jump in production; #18089 back on line)
• 34360, 83, XTO,  Bobcat Federal 11X-2E-S, Bear Creek, t5/19; cum --;
• 34359, 456, XTO, Bobcat Federal 11X-2A-S, Bear Creek, t5/19; cum --;
• 34356, 1,305, XTO, Bobcat Federal 14X-35A, Bear Creek, t6/19; cum --;
• 34358, 30, XTO,  Bobcat Federal 14X-35EXH, Bear Creek, t5/19; cum --;
• 34911, 2,137, Hunt, Halliday 146-93-13-1H, Wolf Bay, t6/19; cum --; some huge wells in the general area;
  
• 34912, 1,134, Hunt, Halliday 146-93-13-1H, Wolf Bay, t7/19; cum --;

***********************************

Projected Number of Permits for Calendar Year 2019

For the number of days in the calculations below, I'm using "number of days" through Sunday, July 14, 2019, this weekend.

It's possible I have made simple arithmetic errors.

The number of permits issued each month by the NDIC may differ from what I have in my database, but if so, it will be very, very close, and won't affect the overall results.

Based on the number of permits in each of the following months, the number in bold is the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,578 permits would be issued for calendar year 2019.

• January, 2019: 1,495
• February, 2019: 1,434
• March, 2019: 1,578
• April, 2019: 1,582
• May, 2019: 1,660
• June, 2019:  1,557
• July, 2019 (through July 14, 2019): 1,877 (it will be interesting to see if the number of permits for July, 2019, reverts to the "mean" so far this year)

Based on the number of permits issued for the first calendar quarter of 2019, the number in bold is the projected number of permits that would have been issued for the entire calendar year had the rate been the same as that for the corresponding quarter. In other words, based on the number of permits issued in 1Q19, there would be 1,497 permits issued for the entire calendar year had that rate remained throughout the year.

• 1Q19: 1,497
• 2Q19: 1,071
• For the first fourteen days of 3Q19: 1,877

I've checked this several times and I believe the numbers are accurate.

One can check the above projections with the actual number of permits issued in North Dakota over the past several years at this site:

• 2019 (estimate): likely to be somewhere between 1,400 and 2,000
• 2018: 1,466
• 2017: 1,189
• 2016: 818 (price of oil tanked due to Saudi opening their spigots)
• 2015: 2,055
• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011:1,916

For newbies:

• North Dakota regulators generally approve permit applications in about 30 days
• permit applications should not be affected by the weather unless there is a lot of site visitation of which I am unaware, but certainly the 1,071 permits projected based on 2Q19 vs the 1,497 permits projected based on 1Q19 appears to validate that assumption; in ND, Jan-Feb-Mar are severe winter months; whereas Apr-May-Jun are much better weather months
• a permit is "good" for one year, but is easily renewed

My hunch:

• most operators determine CAPEX, number of rigs, permit applications, etc, six to twelve months prior to execution
• CAPEX is adjusted semi-annually when things are going well; quarterly when things seem a bit more bleak; and monthly, when things are going to hell in a handbasket
• the number of rigs and frack spreads correlate directly with CAPEX
• permit applications may or may not correlate with CAPEX; I don't know
• I would think operators would have a stack of permits in the hopper in draft status/nearly complete well in advance of submission; 
• it appears NDIC can issue as many as 20 or more permits in one day based on historical data; in other words, it's not the NDIC holding things back once operators decide to proceed (obviously the NDIC is not accomplishing the entire process in one day, but the point is that the number of permits issued in one day is not capped by the regulator)

Thesis:

• the weekly rig count, week-over-week, is meaningless in the Bakken
• the monthly rig count, month-over-month, may be slightly more meaningful than the weekly change
• the monthly permitting activity gives one a much better idea of activity (and dare we say, production?) in the Bakken

If I could only choose one metric to follow the Bakken, it would be the rate of change (increase/decrease) in number of permits on a monthly basis. 

Having said that, even the number of permits issued each year is coming down, and production continues to rise.

Random Note On Number Of Permits, 2019

Disclaimer: the usual disclaimer applies. Typographical and factual errors are likely. If this is important for you, go to the source.

722 oil and gas permits issued by the NDIC so far this calendar year, as of June 22, 2019.

173 calendar days as of June 22, 2019.

On track for NDIC to issue 1,523 new oil and gas permits this year.

From an earlier note, number of oil and gas permits for the following years:

• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011: 1,916

2008: 944 permits

• first permit: 17002
• last permit: 17945

2009: 625 permits

• first permit: 17946
• last permit: 18570

2010: 1,676 permits

• first permit: 18571
• last permit: 20246

2011: 1,924 permits;

• first permit: 20247
• last permit: 22170

2012: 2,522 permits

• first permit: 22171
• last permit: 24692

2013: 2,667 permits

• first permit: 24693
• last permit: 27359

2014: 3,010 permits

• first permit: 27360
• last permit: 30369

2015: 2,055 permits

• first permit: 30370
• last permit: 32424

2016: 818 permits

• first permit: 32425
• last permit: 33242

2017: 1,189 permits

• first permit: 33243
• last permit: 34431

2018: 1,466 permits

• first permit: 34432
• last permit: 35898

2019: 1,397 permits
first permit: 35899
last permit: 37295

So, bottom line, ND oil and gas permits by calendar year:

• 2019, projected --- 1,523
• 2018: 1,466
• 2017: 1,189
• 2016: 818
• 2015: 2,055
• 2014: 3,012
• 2013: 2,671
• 2012: 2,522
• 2011:1,916