Bakken Sweet Spots are Petering Out

The Bakken, as well as other shale oil areas, is not one homogeneous area where equal amounts of can be found. David Hughes in DRILLING DEEPER puts it this way, though here he is talking about gas wells, the same applies to oil wells:

All shale gas plays invariably have “core” areas or “sweet spots”, where individual well production is highest and hence the economics are best. Sweet spots are targeted and drilled off early in a play’s lifecycle, leaving lesser quality rock to be drilled as the play matures (requiring higher gas prices to be economic); thus the number of wells required to offset field decline inevitably increases with time.

However the Bakken, at least through the September North Dakota Industrial Commission  production report, has given no real indication that the Bakken is even close to peaking. But a closer look at the data makes me believe that is all about to change.

The NDIC issues a Daily Activity Report where they list permits issued as well as wells completed and wells released from the tight hole confidential list. These reports usually, but not always, also give the number of barrels of oil per day and barrels of water per day for the first 24 hours of production.  I have gone through every day, back to November 1st, 2013 and collected the data on every well listed that gives production numbers and copied that data to Excel. In that one year and three weeks I have gathered the data form every one of the 2,171 wells that give production numbers. Sorting these wells by well number, which is the original permit number, gives some startling results.

ND 200 Well Avg

To smooth the chart I created a 200 well average of barrels per day per well. The first point on the chart is therefore the average to the 200th well, #23890 and the last point is the 200 well average to the 2171st well, #28971. As you can see there has been a continuous, though erratic, decline in first 24 hour production as the well numbers increase.

ND Prod per 1000

Breaking this down according to well numbers we see production peaked with the 2400s and have steady decline since. Every group of well numbers do not contain the same number of wells.
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Texas RRC November Production Report

The Texas RRC Data Base came out a few days ago. The data is reported through September but of course it is incomplete. The data from the field comes in very slow in Texas and the RRC only reports the data they receive. All data is through September and is in barrels per day.

Texas Crude Only

Crude only has shown a slight downward trend for the last two months. After revision, when the final data comes in, production will likely still be up slightly but if this is any indication, it will be up less than in months past.

Texas Condensate

Texas condensate production started a dramatic slowdown in June of 2013. It actually declined three months in a row, June, July and August of 2013 but then started to recover. But production growth has slowed since that date.

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Gulf of Mexico Crude Oil and Gas Production

This is a guest post by Jean Laherrere

BOEM and BSEE have published in 2014 the GOM oil & gas reserves at end 2010 few months ago and at end 2011 lately.

The big change is that they now report proved and probable reserves = 2P (in contrary to SEC rules for operators reporting at the US Stock Exchange, forbidding to report probable reserves), when before they reported only proved reserves = 1P

They argue:

In order to more closely align BOEM GOM reserves definitions with the Petroleum Resources Management System definitions (SPE/AAPG/WPC/SPEE 2007), this report clarifies that Proved Reserves in this and previous reports are Proved plus Probable (2P) estimates.

The difference between original reserves estimates from previous year found little difference for discoveries before 1995

The difference between 2P 2011 and 2P 2010 is a very large decrease for Thunder Horse (-488 Mb or 573 Mboe) and the largest increase is Great White +73 Mb

Jean 1

The difference between 2P 2010 and 1P 2009 displays a large increase in Tahiti +169 Gb and large decrease with Atlantis -92 Mb (already in decrease in 2009)

Jean 2

The difference between 1P 2009 and 1P 2008 is as important as the difference between 2P and 1P: large increase with WD 030 +61 Mb and large decrease for Atalntis -161 Mb

Jean 3

The change in reserves with time  and definitions does not change the estimate on GOM ultimates: 24 Gb and 210 Tcf
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Bakken September Production Data

North Dakota just released the Bakken September Production Data as well as the September Production data for all North Dakota.

There was a suprisingly hefty increase in Bakken production in September, up 52,568 bpd to 1,120,031 bpd.

Bakken Barrels Per Day

North Dakota production was up slightly less, 52,394 bpd to 1,184,693 bpd. This means production outside the Bakken was down slightly.

Bakken Barrels Per Day Increase

These big increases happen ever so often and are usually followed by a not so large increase for a few months. I think there is some kind of reporting anomaly here. But as you can see the 12 month average increase gives a better indication of what is really going on.
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OPEC MOMR October Production Data

OPEC just published their November Monthly Oil Market Report which contains crude only production data for all OPEC nations. The only big surprise was that everyone had declining production except Libya and Algeria, that is according to “secondary sources”.

OPEC Secondary Sources

I find it interesting that Venezuela has, for the last several months, refused to give OPEC their production data.

All charts below are in the charts below are in thousand barrels per day with the last data point October 2014 and is based on OPEC’s “secondary sources”. I have decided to post all OPEC charts in this post.

OPEC 12

OPEC production declined 226,000 bpd. September production was revised only slightly, up 5,000 bpd.

Algeria

Algeria has stopped their decline, temporally at least.

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