North Dakota Crude Oil Production Falls to More Than Two-Year Low

[thackney]

North Dakota Crude Oil Production Falls to More Than Two-Year Low
http://www.wsj.com/articles/north-dakota-crude-oil-production-falls-to-more-than-two-year-low-1471021332
Aug. 12, 2016

North Dakota oil production dropped 2% in June, falling to its lowest level in more than two years, according to the latest data from the state’s Department of Mineral Resources.

Crude output in the state resumed its downward trend in June, when output hit its lowest level since April 2014, after a one-month hiatus in May, when production ticked up slightly.

Shale oil producers around the U.S. have been hit hard by languishing crude oil prices that have been stuck below $50 a barrel. North Dakota operators have been especially hard hit because of the high cost to extract oil in some parts of the Bakken formation.


Most oil in North Dakota is extracted via hydraulic fracking, where a mixture of water, sand and chemicals is pumped into rock formations push oil out. Such wells are first drilled and then put into production after being fracked, or completed.

“We’re still looking at a $50 price point for increased hydraulic fracturing activity in North Dakota,” said Lynn Helms, director of the state’s Department of Mineral Resources. “We really do expect to drop below one million barrels a day pretty soon.


Total production in North Dakota came to 30.8 million barrels of oil in June, down from 32.5 million barrels in May, according to state data....

https://www.google.com/search?q=North+Dakota+Crude+Oil+Production+Falls+to+More+Than+Two-Year+Low&oq=North+Dakota+Crude+Oil+Production+Falls+to+More+Than+Two-Year+Low&aqs=chrome..69i57j69i60.1140j0j4&sourceid=chrome&ie=UTF-8

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[IsailedawayfromFR]

Remarkable it took this long at such low drilling/completions rates for the production to drop this much, isn't it?

I get so tired of so many people who were saying that the drop in prices and rapid falloff in new wells would lead to precipitous reduction in Bakken production.  Erroneous.

Shows the resiliency of Bakken production in such shallow declines for the older wells.

Look for shale production to last even longer than what many believe.

Forecasts on some individual wells I worked on showed estimated production to last commercially for upwards of 60+ years and had ending decline rates of possibly as low as 3% decline per year.

[thackney]

Oil production in the Bakken has dropped 24% from its peak in 20 months.  That seems a rather significant amount, although it took longer to start falling than I expected.

http://www.eia.gov/petroleum/drilling/pdf/bakken.pdf

The last month, total production for the field dropped 3.2%.  That is not a annualized rate but the drop over the past month.

http://www.eia.gov/petroleum/drilling/xls/dpr-data.xlsx

There are certainly some good wells out there, but the field in general is dropping significantly.

[Restored]

OPEC dumped oil to drive the US producers out of business. Once they are gone, gas prices will go back up.

[thackney]

OPEC dumped oil to drive the US producers out of business. Once they are gone, gas prices will go back up.

US producers are not going to go away.  Some names will change, some will declare bankruptcy while others who better manage their cash/debt will buy those assets and the wells will keep flowing.

What has greatly slowed down is the amount of drilling and now the production rates.  Slowing but certainly not going away.

And the price drops started quite a bit before any OPEC increase in production.  It was the US that put more oil on the market than demand could use.

See page 17, Non-OPEC Crude Oil and Liquid Fuels Production Growth Chart
http://www.eia.gov/forecasts/steo/archives/jul15.pdf

On page 15, World Liquid Fuels Production and Consumption Balance Chart, you can see where global supply was outrunning oil.

[IsailedawayfromFR]

OPEC dumped oil to drive the US producers out of business. Once they are gone, gas prices will go back up.

I would say that the pain brought on by the dump by OPEC is far worse for them than it is for the US.  Their economies are far more dependent upon oil prices than we are.

The oil and gas we have found here is still here and will remain here until we decide to get it.  There is no way OPEC will be able to put the stopper back into the bottle when prices rise back up and US drillers get back underway.

Prices will go back up, for sure, as what we have now is temporary.

You better watch more for the taxman who wants to raise gas taxes, than what the marketplace might do to pump prices.