Texas RRC October Oil & Gas Report

The Texas Railroad Comission has updated their Oil & Gas Production Data Query to include the production numbers for October. The Texas data is always incomplete so the charts all look like there is a big decline in the last few months. This is not the case, the charts only reflect the data that has been received and the production numbers will look a lot more positive after several months.

That being said there is something that can be gleaned from these numbers. Even though the data is incomplete, if production is increasing then last months incomplete numbers should be higher than this months incomplete numbers. Using that logic, there seems to have been a strong slowdown in Texas oil and gas production.

All the last data points are October and is in barrels per day.

Texas Crude Only

In June and July there was a strong increase in production reported to the Tesas RRC by the oil companies. But in August, September and October things slowed down considerably.

Texas Condensate

Texas condensate production has slowed down a lot more than crude. Most Texas condensate comes from their natural gas wells but there are a some wells in the Eagle Ford that produces mostly just condensate.
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Will the Bakken Red Queen Outrun the Growth in Water Cut?

This is a guest post by Rune Likvern 
Who’s Website is: Fractional Flowa

This post presents a closer examination of actual data on Light Tight Oil (LTO) extraction, developments in water cut and Gas Oil Ratio (GOR) for some pools and individual wells in the Middle Bakken and Three Forks formations in North Dakota.

LTO extraction’s primary drive mechanism is (differential) pressure and there are some noticeable trends for LTO extraction from Bakken:

  • LTO productivity (measured as average totals by vintage) in 2014 have increased, most notably from the Middle Bakken formation which has better well productivity than Three Forks.
    There are differences to LTO productivity developments amongst the pools.
  • Water cut; generally increases as the wells ages.
    An indicator for depletion.
  • Water cut; generally increases for newer wells.
    This suggests that the areas with the highest oil saturation has been developed.
  • Gas Oil Ratio (GOR, produced and expressed as Mcf/Bbl); generally increases as the well ages.
  • What appears to characterize a Bakken sweet spot is the presence of natural fractures (favorable geology), high oil saturation and a pressure above hydrostatic pressure.

Further, this post also has a brief look into well economics and describes how well manufacturing is likely to be affected by the decline in the oil price and what this may entail if a lower oil price ($70/Bbl, WTI) is sustained.

Rune 1Figure 01: The chart above shows development in the water cut [water cut = [water/(water + LTO)] for the “average” wells by vintage in North Dakota. Produced water (brine) is transported to dedicated disposal sites.
Chart by Enno Peters.

What is fascinating about LTO wells in Bakken is that the individual wells appear to have their own “personality” when it comes to productivity, surrounding rock properties, water/oil saturation and GOR which makes well management (of close to 9,000 “personalities”) a paramount task.

This post contains in total 30 charts that hopefully are self explanatory.

Acknowledgements

This post was made possible by contributions, comments and suggestions from several professionals within the oil industry and the academia.

The invaluable talents and expertise of Enno Peters made it possible to transform the NDIC monthly production data with the formation data into spreadsheet format.

The spreadsheet format allows to sort well data by formation, pool, vintage, company and much more.

NOTE: Actual data used for this analysis are all from North Dakota Industrial Commission (NDIC). Some data are missing for some wells and after discussions, the consensus was that the presented average LTO numbers after the first 12 months should have around 5% added to account for missing data from some wells as well as adjusting for the effects from assuming all wells starts at day one of its reported first month of operation (on average each well flows for half a month during its first month of reported operation).

For wells on confidential list, data on runs was used as a proxy for production.

By adding around 5% of the presented average flows for the first 12 months and around 4% after 36 months numbers should come close to actual.

Production data for Bakken, North Dakota: Monthly Production Report Index

Formation data from: Bakken Horizontal Wells By Producing Zone

Water cut is the ratio of [produced water/(produced water + produced oil)] and expressed as a percentage.

Water cuts for individual wells may swing from 0% to 100%, suggesting a shut in well or data not reported. For the early months of a well’s life the water cut may be influenced from water used for fracking.

The important messages from this analysis are the trends in well productivity, water cut and GOR on an aggregate level and by vintage.

For this presentation wells from two pools in Mountrail (Alger and Van Hook), McKenzie (Banks, Camp) and Williams (Squires, Todd) are presented. Hopefully these pools constitutes a good representation of developments for similar pools.

A growing portion of wells have been/are being targeted the Three Forks formation which may suggest something about remaining attractive targets to drill in the Middle Bakken.
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Bakken and North Dakota Production Report

The North Dakota Industrial Commission just published their Bakken Monthly Oil Production Statistics and also their ND Monthly Oil Production Statistics.

Bakken Barrels Per Day 2

Bakken production was down 1,598 barrels per day to 1,118,010 bpd. All North Dakota production was down 4,054 bpd to 1,182,174 bpd.

From the Director’s Cut, bold mine:

The drilling rig count dropped 2 from September to October, an additional 3 from October to November, and has since fallen 5 more from November to today. The number of well completions decreased from 193(final) in September to 134(preliminary) in October. Three significant forces are driving the slow-down: oil price, flaring reduction, and oil conditioning. Several operators have reported postponing completion work to achieve the NDIC gas capture goals. There were no major precipitation events, but there were 9 days with wind speeds in excess of 35 mph (too high for completion work).

The drillers outpaced completion crews in October. At the end of October there were about 650 wells waiting on completion services, an increase of 40.

Crude oil take away capacity is expected to remain adequate as long as rail deliveries to coastal refineries keep growing.

Rig count in the Williston Basin is set to fall rapidly during the first quarter of 2015. Utilization rate for rigs capable of 20,000+ feet is currently about 90%, and for shallow well rigs (7,000 feet or less) about 60%.

Sep rig count 193
Oct rig count 191
Nov rig count 188
Today’s rig count is 183

Sep Sweet Crude Price = $74.85/barrel
Oct Sweet Crude Price = $68.94/barrel
Nov Sweet Crude Price = $60.61/barrel
Today Sweet Crude Price = $41.75/barrel (lowest since March 2009)

I just checked Rig Count. It now stands at 181 but one of them is drilling a salt water disposal well. So they have 180 rigs drilling for oil right now.

Bakken Wells Producing

Bakken wells producing increased by 118 to 8,602 while North Dakota wells producing increased by 92 to 11,507. Since Bakken wells are included in the North Dakota count this means at least 26 wells outside the Bakken had to be shut down.
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OPEC November Crude Production Numbers

OPEC just published its December Monthly Oil Market Report with their crude only production numbers for November.

OPEC Change

Total OPEC crude only production was down 390,000 barrels per day but that was after October production was revised up by 190,000 bpd. After revisions only Iraq and Nigeria showed any increase in November.

The data for all charts below is in thousand barrels per day and is through November 2014.

OPEC 12

OPEC crude only production stands at 30,053,000 barrels per day.

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The EIA’s World Oil Production Numbers

The EIA has recently published their International Energy Statistics. Their stats include all liquids such as NGLs, biofuels and even refinery process gain. But I only track actual oil. The EIA does not track “Crude Only” so we are forced to track what they do track which is Crude + Condensate.

The EIA is about four months behind with their world petroleum data. All data in this report has data through August, 2014 and is in thousand barrels per day.

World

World C+C production was down 124,000 barrels per day in August. But according to the IEA it will be up considerably more in September.

Non-OPEC

Non OPEC production shot up in November, 2013 but has made no progress since. Though US production has continued to climb, declines in the rest of the world have kept it from increasing.
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