Bakken and N.D. Update for July

North Dakota has released their Bakken and North Dakota production numbers for July.

Bakken Barrels Per Day

Bakken production was up 19,456 bpd while all North Dakota production was up 18,134 barrels per day. This means that North Dakota production outside the Bakken fell by 1,322 bpd or a little over 2%.

Bakken Wells

Bakken wells producing increased by 195 to 8,065. North Dakota wells increased by the same amount to 10,952 so non-Bakken wells were unchanged at 2,860.

Bakken bpd per well

Bakken bpd per well fell by one to 130. All North Dakota bpd per well was unchanged at 102 bpd per well and wells outside the Bakken were unchanged at 22 bpd per well.

Bakken Change

The last 12 months has saw an average per month increase in production of 19,708 bpd. That works out to be 236,496 bpd increase over the last 12 months. I am betting that will drop considerably in the next 12 months.

From the Director’s Cut:

The drilling rig count was up two from June to July, and up one more from July to August. The number of well completions increased from 188 in June to 197 in July with summer weather and no significant rain events. However, there were still 4 to 5 days with wind speeds in excess of 35 mph (too high for completion work).

 The drillers continue to outpace the completion crews. At the end of July there were about 630 wells waiting on completion services, an increase of 45.

I was mislead by Helms when in last month’s Director’s Cut he said:

The drilling rig count was up one from May to June, and up two more from June to July.
The number of well completions increased as weather impacts eased in June…

They did not. They decreased from 227 to 188. Or at least that is what he is saying now. So here is what Helms is saying about wells completed:

May 227 wells completed. Production up 36,869 bpd.
June 188 wells completed. Production up 51,858 bpd
July 197 wells completed. Production up 18,134 bpd

It is becoming obvious that “wells completed”  is a poor guide as to how much production is up or down. And I will have to adjust my estimate of the number of completed wells needed to keep production flat. At present I can only say the number is somewhere above 150.

EDIT: Regex Wald, in the comments section below, pointed out something I completely missed when I skimmed this month’s Director’s Cut. At the bottom of the last page, in very small print, we have this. Bold mine:

Disclaimer: The number of completions is an estimate on the part of the director based on idle well count and a typical five year average. Neither the State of North Dakota, nor any agency officer, or employee of the State of North Dakota warrants the accuracy or reliability of this product and shall not be held responsible for any losses caused by this product. Portions of the information may be incorrect or out of date. Any person or entity that relies on any information obtained from this product does so at his or her own risk.

Now someone please tell me how the number of new well completions can be estimated by counting the number of idle wells or by looking as some “typical five year average”? What on earth is he talking about? What typical five year average?

Bakken by County

Using the State Summary Report July 2014 adjustment for confidential wells, county production was:

McKenzie county,     up 14,674 bpd      to 370,272 bpd.
Mountrail county,     up 3,600 bpd       to 267,837 bpd.
Williams county,      up     591 bpd        to 157,481 bpd.
Dunn County       down     277 bpd        to 183,067 bpd.
The Rest of N.D.  down    454 bpd        to  132,059 bpd.

Wes435 posted the below chart in the comments of my last post. It is the producing wells of Emerald oil, a rather small company with some sweet spot acreage in the Bakken. The numbers are BOE or barrels of oil equivalent, so it includes natural gas and natural gas liquids as well as oil.


Here is a link to a full screen graph of this post. And the data and some other interesting charts can be found here Emerald Oil Corporate Presentation. The data for the above post can be found on page 20 of that presentation.

I took the data for the 17 wells that show the data out to 90 days, (the chart shows only 15 but the data has 17 wells out to 90 days), and found that their 24 hour average production was 1,631 bpd, their 30 day average production was 758 bpd and their 90 bpd average was 544. 

The data has 5 wells with 270 day production numbers. They average 445 barrels per day for the first 270 days. So obviously the decline rate drops quite rapidly after the first few month. It is like popping the top on a seltzer bottle, it all gushes out suddenly then the decline slows.

But Eagle Ford is much worse. The chart below is from the “Market Realist”, Must-know: The relationship between oil production and oil rigs

Eagle Ford BPD

The first full month production from Eagle Ford wells is just a tad over 300 barrels per day.

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182 Responses to Bakken and N.D. Update for July

  1. Coolreit says:

    Crucial info from the report:

    “Today Sweet Crude Price = $74.50/barrel (all-time high was $136.29 7/3/2008)”

    They can’t possibly make much money at this price! How long before production falls at these marginally profitable prices?

    • B says:

      That problem is being worked on.

      North Dakota Oil Growth Seen Slowed by New Gas Flaring Rules

      [Excerpt from article]
      With North Dakota oil such a prominent part of the energy landscape, a new price benchmark should be developed that reflects the price producers can sell for straight from the well, [North Dakota Department of Mineral Resources Director Lynn] Helms said. Current benchmarks in Oklahoma and Minnesota are at various times higher and lower than the price on the ground, he said.

      “It would be nice to have one that accurately captures what the tax department sees as the price paid at the well,” he said.
      [End of excerpt]

      • Watcher says:

        As of now this looks like hand waving lip service.

        The story was starting in January, anyone guilty of too much flaring gets production restricted. So nothing like that is happening yet.

        The other story was starting in June each drill permit application had to include a plan for gas capture and the applications rec’d so far failed to provide such a thing.

        July permitting was up from June. The alleged reqmt on the applications is clearly not getting more of them rejected.

        • Watcher says:

          Oh and btw, 18K bpd increase for a NoDak July is not good, assuming it’s accurate. How do you go from 50+K to 19K in weather that is the same or better?

          And the price fall hadn’t happened yet for this data.

  2. Along for the Ride says:

    The last day or two the radio news at the top of the hour has trumpeted the facts that the price of gasoline in the U.S. has fallen 19 cents in the last 52 weeks, and that future gasoline price decreases are coming because of the current and growing oil glut and increase in refining capacity. The announcer predicted the U.S. economy would benefit significantly from lower oil prices.

    All is well, the future is bright! How’s everyone’s fantasy football tams doing?

  3. Regex Wald says:

    I see Helms put a disclaimer into the Director’s Cut now:

    Disclaimer: The number of completions is an estimate on the part of the director based on idle well count and a typical five year average. Neither the State of North Dakota, nor any agency officer, or employee of the State of North Dakota warrants the accuracy or reliability of this product and shall not be held responsible for any losses caused by this product. Portions of the information may be incorrect or out of date. Any person or entity that relies on any information obtained from this product does so at his or her own risk.

    😀 😀
    Well, that ought to answer a couple questions raised here and create a dozen or so new ones. I bet you Lynn Helms, or at least someone who reports to him, reads this blog. Awful lot of coincidences between what gets discussed here and what ends up in future Director’s Cuts.

    • Watcher says:

      I’m guessing now, based on this data, that he doesn’t really know what oil output is. He’s either getting that from the tax people (who measure it how?) or he has some similar thing being done on long term averages as he says for his completions.

      You know, the problem with this quote is in past winters he would quote a poor number and talk about cold temps and snow and wind speed. If it’s all a guess, why did he feel like he had to explain it?

      Something is bogus here.

    • Thanks Regex, I completely missed that. It was at the bottom of the last page in very small print. It looks like Helms inserted that to cover his ass. But the statement makes no sense whatsoever:

      The number of completions is an estimate on the part of the director based on idle well count and a typical five year average.

      How on earth can he estimate new well completions by counting the number of idle wells? And what has a “typical five year average” got to do with anything? I am floored by that statement. WTF?

      • Doug Leighton says:

        I don’t think you’ll get any useful information by reading disclaimers. They are written by lawyers and designed to avoid lawsuits and therefore are ridiculously broad in scope. (they’re deliberately confusing to broaden scope even further). In all likelihood Helms doesn’t even read the disclaimers but simply leaves them to the legal department.

        • Doug, one bit of very useful information we do get from this disclaimer is this:

          We get no useful information from reading the director’s estimate of new wells completed!

          • Doug Leighton says:

            Yeah, that’s hilarious: In an obfuscating sense.

            • Watcher says:

              The next disclaimer will announce that oil output quotes are similarly doubtful.


      • Frugal says:

        How on earth can he estimate new well completions by counting the number of idle wells?

        Maybe they don’t actually count the number of new wells coming on line each month, but only count the total number of producing wells. They then determine the number of new wells by subtracting last month total wells from this month total wells. They then adjust this number up or down by comparing last month idle well estimate with this month idle well estimate.

        This sounds crazy but else could the disclaimer statement mean?

  4. B says:

    Two different but related stories within a couple days of each other…

    Minnesota Power to idle four coal-fired electrical generation units

    [Excerpt from article]
    This is the worst I’ve seen it in my 18 years with the utility,” Al Rudeck, Minnesota Power’s vice president of strategy and planning, told the [Duluth, Minn.] News Tribune on Wednesday, referring to Burlington Northern Santa Fe Railway’s ability to transport coal from mines in Montana and Wyoming to the Northland. “BNSF just hasn’t delivered. We’re very, very frustrated.”

    It’s taking BNSF two to three times longer than usual to get shipments of coal to the Northland, Rudeck said. The utility’s coal stockpiles are less than half of where they should be.

    Pat Mullen, Minnesota Power’s vice president of marketing and corporate communications, told Wisconsin Public Radio that this is the first time the utility has had to idle plants because of coal shipping problems.

    BNSF officials have told Minnesota Power that the delays are because of weather and system congestion, Rudeck said.

    Railroads have been struggling in recent months to juggle grain and coal shipments while also handling an increasing amount of oil from the Bakken oil fields of North Dakota. Rail shipping delays have been the subject of a number of federal hearings, including one held by the U.S. Surface Transportation Board in Fargo last week, and one held by the Senate Commerce Committee in Washington on Wednesday.

    Certainly the way that the rail capacity is being used out in the Bakken area has really constrained the system,” Mullen said. “It wasn’t that long ago that if we needed additional coal … it was just a matter of picking up the phone and more cars came. There was just a capacity where you had that flexibility to really manage your business appropriately.”
    [End of excerpt]

    Crowded railways slow ore shipments from Iron Range to Duluth

    [Excerpt from article]
    On Friday, officials at Minnesota iron ore mines said they can’t get all their finished taconite pellets to market because of a shortage of rail service apparently spurred by the huge increase in the amount of oil moving by rail.

    Taconite industry officials confirmed Friday that they are making taconite faster than they can move it by rail, with millions tons of pellets stockpiled and waiting for trains.

    The shortage of rail service is an unintended consequence of a huge increase in demand to ship crude oil by rail. Railroads now are shipping more than 15,000 train carloads of petroleum products each week, more than double the amount in 2010. Oil shipments from North Dakota are competing for rail space with many other products nationally, but especially in the Upper Midwest….

    Last winter, as cold conditions thwarted rail shipments and more trains went to move oil, the Minntac taconite plant in Mountain Iron alone “dumped 2 million tons on the ground, and they still haven’t caught up with rail service,” said Mike McCoshen, president of Hallett Dock Co. in Duluth, which serves the iron ore industry.

    McCoshen noted that while taconite pellets require special railcars that haven’t been pulled away for other uses, there’s been a logjam of other trains on tracks and a shortage of locomotives at both Canadian National and Burlington Northern Santa Fe, the major rail lines in the region.

    Two mines, U.S. Steel’s Keetac operation and Arcelor Mittal’s Minorca Mine, are sending product — a special taconite “pellet chip” — from the Iron Range to Duluth harbor docks by truck. [about 60-80 miles one way]

    I’ve been in this business 37 years and I’ve never seen that before. I don’t know that it’s ever happened to bring it down by truck,” McCoshen said, adding it’s good news for Hallett — which is transferring the taconite to lakers — but not a viable long-term solution for the mines.

    In Minnesota’s farm country, some grain elevators have moved to using trucks instead of rail to move grain to market, unable to secure enough trains to handle the harvest.

    And on Friday, officials tied to the Duluth port said the rail backlog also could hurt marine business. With spring wheat and durum wheat now being harvested in the Dakotas and western Minnesota, saltwater freighters from around the world already are on their way to Duluth to pick up loads of the fresh crop to move worldwide.

    If trains aren’t available to get the crop to the Twin Ports, those ships would have to wait, or divert elsewhere.
    [End of excerpt]

    • Carpetbagger says:

      And remember, it’s not just the oil but also frac sand and drilling material. Just last weekend I was waiting at the Houston airport and overheard a group of guys intensely discussing how they were going to transport sand to their site.

      • Old farmer mac says:

        If nothing else the good times in the rail industry prove two things. One is that rail is essential and does things trucks just can’t do.

        The other is either the luck or brains of Bill Gates and Warren Buffet.

        Now this quote is not directly related to todays lead but it is never the less relevant to oil and energy markets.

        ”The main effect of Scottish independence, in fact, would be on England. Scotland is overwhelmingly left-wing when it comes to voting for the British parliament. David Cameron’s Conservative party has just one member from north of the border. Nearly all Scottish MPs are Labour or Scottish Nationalist, a party that on most issues is well to the left of Labour.

        ”Remove Scotland from the equation, and British politics ceases to be such a two-horse race. The Conservatives hold a substantial edge in the rest of the country. The main effect of Scottish independence, therefore, would be to deal a devastating blow to the British Labour Party, and almost certainly secure the Conservatives in power in Westminster for a generation.”

        It seems the Scots are liberals to the last man except one in Parliament.

        There is also a report out about the English lying about the oil reserves prior to the last referendum on independence that appears to be legit and will probably have a significant impact on voter turnout and attitudes.

        Scotland may be an independent nation soon.

        • Brian Rose says:

          That’s a very interesting effect of how Scottish independence would change things. A more conservative Britain could leave the EU since it’s the Conservatives that want that.

          I read an article on Spain’s Catalonia region calling more and more loudly for independence, and the hypothesis is that a successful Scottish independence would stoke confidence in other European states gaining independence.

          At some juncture the EU will encounter another round of financial crisis that will result in more calls for monetary and financial unity as a solution. If Scotland votes for independence it will give that much more power to the regions within European countries that want independence from the centralized approach that has thus far patched together the debt problems within the EU.

          All it would take is one region or country voting to leave the Euro. Global markets crashed at the prospect of Greece, which is 2% of EU GDP, leaving the Euro. Scottish independence could very well be the event that catalyzes a stronger separatist movement in the next crisis. Unintended consequences abound.

          That’s the issue with peak energy. If net energy begins to decline then some chain in the links that keep the global economic engine growing will break. Whatever the weakest chain is no one knows. In 2008 it was the U.S. housing market, but had that chain been stronger, then oil prices would have risen until the next weakest chain broke.

          What will the weak chain be next time? Japan’s debt? Eurozone debt? U.S. junk bonds? We’ll certainly find out eventually…

          • Watcher says:

            It wasn’t Greece leaving the EU that was panic inducing.

            It was Greece maybe defaulting on debt and triggering credit default swaps globally that was panic inducing.

            And so that debt was not allowed to default. It wasn’t paid. It just wasn’t allowed to default.

          • Ilambiquated says:

            >A more conservative Britain could leave the EU since it’s the Conservatives that want that.

            That’s what the tabloids would have you believe, but EU law is so baked into UK law that it is not even clear what “leaving the EU” would mean. Without rewriting tens of thousands of pages of UK law, a UK outside the EU would be nearly the same as inside, except it would be shut out of decision making.

            The populist feeling that you can just wander in or out of the EU institutions at will reminds me of the belief that beating Saddam’s army would turn Iraq into a beacon of democracy. That’s just not how things work.

            It takes decades of “harmonization” to get into the EU, and it would take decades of “disharmonization” (starting with realistic plan for an alternative) to get out. No democratic government has that long a shelf life.

            Here is a summary of the areas of EU legislation.


            Good luck reading through it.

            >If Scotland votes for independence it will give that much more power to the regions within European countries that want independence from the centralized approach that has thus far patched together the debt problems within the EU.

            Where are you getting this from? An independent Scotland would be more dependent on the EU. Also the UK isn’t in the Euro, so it is hard to connect the Scottish vote to the Euro at all, except to say that an independent Scotland would probably leave the pound and join the Euro.

            >Global markets crashed at the prospect of Greece, which is 2% of EU GDP, leaving the Euro.

            Global markets cashed when the US housing market crashed and brought Wall Street down. The Greek crisis was a symptom of that, not the cause.

            >All it would take is one region or country voting to leave the Euro.

            Leaving the Euro would be courting disaster for any country, so it is unlikely. And like leaving the EU, it would be immensely complex, not just a matter of flicking a switch. Meanwhile countries continue to join. Lithuania is entering in January, and the Balkan countries are all moving closer.

        • Mike says:

          Yes there are vast quantities of oil under the North Sea. The conventional oil there is running out, but there remain vast reserves just waiting to bee exploited. Just like there is enough gold in the North Sea to pay off the UK’s total debt. Unfortunately, getting the gold would be hideously expensive, so costly that the value of the gold got would be less than the initial investment. And the same applies to the remaining North Sea oil. The reports in the media announce breathlessly and with great excitement that all the Scottish Government has to do is provide the funds to get out the oil by FRACKING. Undersea fracking. In one of the most hostile environments where oil is drilled. How many wells would need to be drilled to maintain production at a level needed to fill the budget gap faced by a newly emergent sovereign nation? How much would be the annual flow of oil that is going to provide the revenues to enable the Scottish Government to lavish cash on the eager populace that will have voted for independence assuming there is this fabulous wealth down there? How would the Red Queen effect impact on these dreams and delusions? And there is another thing: the reports -admittedly put out in the MSM by non geologists with zero understanding of rocks and minerals – these reports suggest the oil lies in beds known as Kimmeridge Clay. Now Kimmeridge Clay down here in Buckinghamshire in the South Midlands of England, is a thick, plastic, water retentive clay with zero porosity. It is not a shale with distinctive lithification planes and high content of sands and limestones and the porositynecessary for successful fracking . Maybe it is different up near Scotland under the North Sea and more ready to yield up these fabulous riches; but I do wonder if these rocks are going to be any more productive than the Monterey Shales in Californis. The probability is that Alex Salmond – and David Cameron – are being fooled by how much can be produced and are being wildly optimistic about the future wealth that may be available whether to an “independent” Scotland or to the UK as a whole.

    • Jon Kutz says:

      And with a late wet fall and an early frost (last night) the need for PROPANE is going to be high this fall and winter. Last winter we had the pipeline from Canada all winter supplying propane and we were short of the stuff here in the Midwest. Now all that PROPANE that came from the pipeline last winter will have to come by rail (or truck from Texas?) and even last year they were having trouble getting rail cars where they needed them to try to get more PROPANE moved into the Midwest.
      I look for very high PROPANE prices by mid-winter and very possibly significant shortages.
      Luckily I heat my house with electricity (ground source heat pump) and my electricity comes from North Dakota generators where they have dedicated rail to bring the coal to the power plant.
      It will be a very interesting winter?

      • notanoilman says:

        Might pay people to increase home storage capacity and fill up now rather than wait for the prices to rise. Will also benefit future years as this problem is not likely to go away.


      • wimbi says:

        The propane company just came and took our big, full propane tank away, and paid us for its contents. We got off propane by the usual steps, none of them challenging at all, and resulting in far better living quarters.

        1) Insulate the house to the limits available by space.
        2) buy an overkill amount of PV- look around for bargains in components from people updating to even bigger systems.
        3) get a good space heat pump and another water heat pump, run on PV. These things are remarkably better than they were even a few years ago. Also easy to install.
        4) get a good wood stove for backing up to after coming in from the cold.

    • Synapsid says:


      There’s an additional dimension to this problem: it’s been wet in much of the agricultural Midwest and farmers need propane for the crop driers they use. The propane deliveries are hampered by the lack of train space–oil transport is locking it up.

      I’ve read that this was also the cause of the propane shortages in the East last winter; it looks to be a looming problem for the coming winter too.

    • notanoilman says:

      Peak Trains


  5. Ebola, it’s a numbers game.

    Ebola spreading rapidly through West Africa

    If the virus were to continue at the current transmission rate of 1.4 to 1.7 people for each newly person infected, West Africa could gain an additional 77,181 to 277,124 cases by the end of 2014, Chowell-Puente said in an email…

    In essence, if government officials and aid workers can reduce the transmission rate to less than one, the spread of the ebola virus will cease to be an epidemic.

    So if they can reduce the transmission rate to an average of .9 people per person infected they can eventually halt the epidemic. But if it stays above 1 then it will spread throughout Africa and perhaps the world.

    All previous outbreaks have been in isolated villages in Africa. To control it they just sealed off the village, or villages, letting no one in or out. But this one has already escaped to major populated areas. Thousands of people have been infected. This could turn out to be something that shocks the world.

    Some people are infuriated with Obama for not doing enough.
    America’s infuriating response to the Ebola crisis

    And Fox News is infuriated with Obama for doing too much.
    ‘It doesn’t make sense’: Concerns over enlisting DoD in Ebola response

    • Watcher says:

      that’s the R0 of Contagion fame.

    • Brian Rose says:

      I read that Fox News article last night, and it gave me a strange combination of head slapping and laughter.

      The premise is that the President is straining the military by sending personnel and building a 25 bed facility (basically, a tent with beds and supplies). So sending 200,000 troops to 2 wars for 10 years and building the biggest bases ever created in U.S. history didn’t strain the troops or the military, but sending a few hundred military personnel at the same time we do airstrikes on ISIS is gonna break the military.

      The article left me awe struck that most of those who hold these views are incapable of seeing that simple dichotomy. If Ebola mutates due to the epidemic giving it a better statistical chance of doing so, then the consequences will be far, far worse than 9/11 or the Iraq War. If a series of mutations allows for airborne transmission it will be devastating since it will take a few weeks to confirm it has mutated. Just one week of it transferring through the air without health officials knowing and it will be global and severe. I’d gues worse than the 1918 Spanish Flu.

      90% of the quotes in the article come from a single “source” in the DoD. Not ranking officials, generals, or anyone with a title or even a name.

      • Watcher says:

        Not too many battle commanders are trained in building hospitals.

        • Brian Rose says:

          That’s exactly it!

          As I read it it was clear to me that the kind of military you send for health and disease treatment is distinctly different from the kind that sends an airstrike, flies a drone for recon, or does warzone embedded special ops missions.

          The idea that there’s much of any overlap or “stealing” of resources from one area to give to another in this case is flawed. Not to mention there are over 100,000 less troops deployed today than there was 5 years ago. Send 5,000 to contain Ebola and you still have 95,000 less deployed troops than before.

          • Watcher says:

            Won’t do much for recruiting retention, either.

            “Lieutenant, please inform your men that you will be leading them into an area infested with a disease that kills most of who gets it. I’ll be monitoring the situation from here.”

            • Doug Leighton says:

              That’s not only extremely funny, its also sadly true.

              • Watcher says:

                (Reuters) – Liberia’s President Ellen Johnson Sirleaf has sacked 10 senior officials because they failed to heed a warning to return from overseas travel to help the government’s fight against an Ebola epidemic that has killed at least 1,100 Liberians. The officials, who include six assistant ministers, two deputy ministers and two commissioners, were dismissed with immediate effect for being “out of the country without an excuse,” according to a statement from the president’s office.

        • @Watcher:

          Not too many battle commanders are trained in building hospitals.

          That’s not true.

          Commanders are well trained and experienced in dealing with both battlefield injuries as well as non-combat illnesses and conditions. They indeed (must) know how to build, staff, operate and sustain every sort of medical service. At the brigade- or higher level this means treatment of wounds, also sanitation-related diseases, malnutrition, infections, sanitation-related diseases, insect related diseases, blood diseases, the effects of chemical and biological combat agents, radiological exposure, accidents unrelated to combat … indeed, running hospitals is what commanders above the brigade level do. The morale/combat effectiveness of their charges depends upon it.

          Poor medical care and the soldiers will be unwilling or unable to fight.

          • Watcher says:

            Building hospitals, not running them.

            In the states that would be outsourced to a local civilian construction contractor. Hell, that was even done for Ramstein.

            You don’t presume that because you have a military, you can send 1000 guys somewhere to build a hospital.

    • notanoilman says:

      Directive 7-12


  6. Watcher says:

    “I took the data for the 17 wells that show the data out to 90 days, (the chart shows only 15 but the data has 17 wells out to 90 days), and found that their 24 hour average production was 1,631 bpd, their 30 day average production was 758 bpd and their 90 bpd average was 544. Now this does not mean that they were producing 544 bpd on day 90 but their 90 day average was 544 barrels per day.

    I tried to extrapolate that out and figure out what they would be actually producing on day 180 but my math skills failed me. Perhaps someone else will be kind enough to do that.”

    Hmmmmmmm. “Now this does not mean they were producing 544 on day 90 but their 90 day average . . .”

    It probably DOES mean that’s the average of all wells on day 90 and that’s what they were producing — 544.

    The problem is the 30 day average of 758. If that were the average production during the 30 days, then production had to go from 1631 down to about 115 bpd at the END of 30 days to get an average production DURING the 30 days of 758. (1631 – 115 ) / 2 = 758. We know it wasn’t down to 115 because the next 60 days were higher than that. “Average” must mean the average of all wells, not the average over the time period.

    If average of all wells at the end of 30 days was 758, you get (1631 – 758) = 873 and 873 / 1631 = 53% decline rate that month. Credible.

    758 – 544 = 214 and 214 / 544 = .394ish or 39% decline from day 30 to day 90.

    One can curve fit a negative exponential out to 180, which I will now (watch carefully here) do with my eyeballs and declare there will be a 20% decline between day 90 and day 180 and so 544 > 0.8 = 435 bpd on day 180.

    (1631 – 435) = 1196 / 1631 = 73% decline in the first 60 months.

    • Watcher says:

      6 mos, not 60.

    • Yeah, I think you are correct.

    • Jeffrey J. Brown says:

      Of course these guys have monthly production data, and if it’s not shown somewhere, IMO they are trying hide the actual decline by averaging in later months with earlier months. According to their presentation, on average their wells produced 782 BOE/day in the first 30 days, 557 BOE/day in the first 90 days and 491 BOE/day in the first 180 days.

      It seems to me that the only thing we can tell is that on average, their wells produced about 24,000 BOE in the first 30 days (782 BOE/day), about 26,000 BOE (433 BOE/day) in the next 60 days and about 38,000 BOE (422 BOE/day) in the next 90 days after that.

      Consider some actual crude oil production data by year for a shallow oil field I found in West Central Texas. The production data are for a six year time period from the production peak out five years (for a total of six years), but the math works the same for months, i.e., analogous to six months of production data.

      Year One: 440,000 BO (1,205 bpd)
      Year Two: 416,000
      Year Three: 340,000 (average over years 1-3, 1,092 bpd)
      Year Four: 239,o00
      Year Five: 194,000
      Year Six: 136,000 (average over years 1-6, 806 bpd)

      Note that a far more meaningful metric is average production in year six, which was 373 bpd, which was 46% of the six year average production rate of 806 bpd, and 31% of the first year production rate (and about a 20%/year decline rate).

      There is no reason these guys could not simply show average daily production by month, unless they don’t like what the actual month by month data would show.

      • Watcher says:

        The BoE stuff is signif, too.

        More and more and more we can’t believe things out of NoDak.

      • Chris says:

        The following paper from 2011 on “the future of oil supply” is interesting and shows the typical well production profile for Bakken in Figure 11. You can see the “falling curve” as an inverse function of time.

        At that time they predicted that “US tight oil production was likely to peak around 2.5 mb per day (compared to total US oil production of 6.9 mb per day in 2008) and is likely to decline very rapidly after 2017. Other, less detailed studies are more optimistic: for example, the IEA projects a peak of 3.2 mb per day in 2025, followed by a slower decline.”

        Note that the EIA is seeing the peak now in 2016-2017… followed by a slow decline.

    • Chris says:

      I tried another approach fitting a function of the form (a+b*x)^c, with c being negative. This kind of curve is seen in determining the order of a chemical reaction. Correlation is pretty good (but there is only 5 points). Then, we have the average production, not the production. So we have to compute the derivative of the function vs time. This gives the following results for the five wells going to 270 days:
      Production Day 1: 1608, day 30: 594 decrease is ~63%
      Production Day 90: 435, decrease day 30 – day 90: ~27%, decrease in 3 months: 73%
      Production Day 180: 357, decrease day 90 – day 180: ~18%, decrease in 6 months: 78%
      Production Day 270: 318, decrease day 180 – day 270: ~11%, decrease in 9 month: 80%
      82% predicted decline for the first year, 18% decline for the second year, 11% decline for the third year.

      • Chris says:

        And if the “average production” is the average production of all wells as stated by Watcher instead of the average production over the period, using the same model as above, we have:
        Decrease 6 month, 69% (similar to Watcher 73% with other data)
        Predicted decrease first year, 78%
        Predicted decrease second year, 18%
        Predicted decrease third year, 11%

        These are the decreases in production between day 1 and day x, not the decreased cumulative production from one year to the next one. From the first year to the second year, the production would drop by 36%, then 14% for the third year.

      • Jeffrey J. Brown says:

        You might try my actual production case history and see if you can derive the average production rate for day 151 to day 180 for the Bakken wells.

        My field averaged 1,205 bpd the first year, 1,092 bpd for the first three years and 806 bpd for the first six years. Given that data, what was the average production in the sixth year? I don’t think it’s possible to derive a unique answer, which is my point. IMO, these guys don’t want to disclose the average production in the sixth month versus the average production in the first month.

        My case history:

        Year One: 440,000 BO (1,205 bpd)
        Year Two: 416,000
        Year Three: 340,000 (average over years 1-3, 1,092 bpd)
        Year Four: 239,o00
        Year Five: 194,000
        Year Six: 136,000 (average over years 1-6, 806 bpd)

        • Chris says:

          Jeffrey in your case, the production seems to decrease more or less linearly with time. So 1205 bpd is the average over year one, and also the production after 6 months. First day production would be 1343bpd and production after one year would be 1164bpd. I guess the geology should influence the decline rate. So one cannot necessary compare one field to another.

        • Chris says:

          The production profile depends also on the pumping speed. If the rate of extraction is low comparing to the diffusion of the fluid, the production will be nearly constant at the beginning (plateau) and than decrease slowly with time following a S curve. It seems you have this kind of production profile. If you try to extract as much fluid as possible, the rate will be high at the beginning and decrease quickly following more or less an inverse function (typical fracking profile). I saw this during my course of chemistry (“flow in porous media”, not sure of the translation). I am trying to find the different formula. This might help to model the production profiles.

          • Jeffrey J. Brown says:

            If a reservoir is only delivering 100 bpd to the wellbore, it doesn’t matter how fast you try to pump the 100 bpd out. In any case, as production declines in most wells, it’s primarily a result of pressure depletion around the wellbore. An exception to this would be a high quality water drive reservoir where production declines as the Oil/Water contact moves upward.

            Regarding the Bakken data, IMO it’s an exercise in futility since there is no unique answer, and in any case, we are trying to guess at data (average production in the sixth month, or 24 hour production on day 180) that the operator has, but apparently does not want to divulge, because they want to average sharply lower production values in later months with much higher production values in earlier months.

          • Dennis Coyne says:

            Hi Chris,

            The production profile can be modelled with a hyperbolic function of the form q=a/(1+b*c*t)**(1/b) where t is time in months (t=0.5,1.5,2.5,….)
            and * stand for multiplication and ** for exponentiation.

            I get a best fit to the Bakken data with a=12,107, b=1.1, and c=0.1637.

            Speadsheet with data can be found at


            The data is based on NDIC data collected by Enno Peters for Bakken/Three Forks wells which started producing between Jan 2008 and March 2014.

            Chart with data and model below horizontal axis is months from first output, vertical axis is output in barrels per month for the average new well.

        • BW Hill says:

          Hi Cris:

          Try a logistic function. We plotted the IHS data set on the Bakken through 5/12 on 4598 operating wells. It is the same data set that David Hughes used in his Drill Baby Drill report. Make sure that you use a Levenberg-Marquardt algorithm. We got a correlation coefficient of 0.9982 with that approach. The function generated was:

          y = 23.35 / (1- 0.95e^(-0.011x)): x is in months, and you can use a decimal equivalent.
          y = production/day at a point in time. x=0: gives 467 b/d.

          By integrating the function above between t1 and t2 you get cumulative production. Keep an eye on our site, one of these days we’ll put up a page on a function to describe Bakken decline rates, and how to calculate them.

          Hope this helps

      • Dennis Coyne says:

        Hi Chris,

        I have another reply further down the thread about Bakken well profiles using the Arps hyperbolic function with NDIC data from Enno Peters.

        There was a comment about David Hughes suggestion that 1400 wells per year (or 117 wells per month) being enough to keep output flat.

        Ron is correct that over the short term (for two or three months) we would need more like 165 new wells to keep output flat.

        What Ron might be missing is that the legacy decline will decrease as the number of wells added decreases. So for a couple of months output would be flat, but then legacy decline would decrease and if 165 wells continue to be added the output will increase unless fewer new wells are added. Over the longer term the number of wells added will need to continue to decrease to keep output flat.

        The Hughes estimate asks the following question:

        “what number of wells would need to be added per month to keep output relatively flat (+/- 5% of 1000 kb/d) over the next 5 years?”

        If we add 117 new wells each month over the Sept 2014 to August 2020 period we get the output chart below, (this assumes the well profile from the 2008 to 2013 period remains constant, if it decreases because sweet spot drilling locations are used up, then more wells would be needed). This is a simplifying assumption because we do not know when the well profile will start to decrease and we also don’t know how quickly this will occur. Any guess by me is always deemed too optimistic by many who comment here.

        • Okay, we need to understand what Ron understands and what Ron don’t understand. 😉

          Legacy decline has nothing to do with new wells except that they will also become part of the legacy decline after they start producing… and begin to decline. Legacy decline is how fast all the wells in a field are declining. And that is all it is about. Legacy decline has nothing to do with how many wells are added each month until they are producing and start to decline.

          Of course new wells have a much higher decline rate as that is exactly what we have been talking about with those Emerald wells. That is a given. However… Legacy decline is about the decline rate of a field. It has absolutely nothing to do with new wells.

          If in any given month you have…
          A legacy decline of 70,000 barrels and new wells produce 80,000 barrels then you will have a net increase of 10,000 barrels per day.

          If the net increase is 70,000 barrels, exactly the same as the legacy decline, then you will be flat and have no gain in barrels per day.

          If, from new wells you only get 60,000 barrels but legacy decline stays at 70,000 barrels then you will have a decrease in production of 10,000 barrels per day. That is what happened last December, new well production was not enough to make up for legacy decline and production fell by about 50,000 barrels per day.

          As production increases the total barrels lost to legacy decline will increase.
          If production drops then the total barrels lost to legacy decline will decrease.

          Legacy decline is nothing but the decline rate so I really don’t know why we have to stick the word “legacy” in there. It is the decline rate of the field in general, and that is all that it is.

          Here is how it works.
          Newer wells decline faster than old wells.
          With a given decline rate, higher production means more barrels will be lost to decline. Likewise a lower production will mean fewer barrels lost to decline. But… production from new wells will offset that decline.
          That is what we are seeing in the Bakken today, a very high decline being more than offset by production from new wells. 70,000 barrels of decline, 100,000 barrels production from new wells leaving us with an increase of 30,000 barrels per day. Third grade arithmetic.

          This is just so simple that I am at a loss to understand why it is just not as simple to everyone else.

          • Dennis Coyne says:

            Hi Ron,

            I understand it very well. The rate that new wells are added matters a lot because as you pointed out after 1 month new wells are part of the field decline.

            As a very simple example consider June and July in the North Dakota Bakken/Three forks.

            Let us assume that 200 wells were added each of those months, let us also assume that month 1 output of the average well is 490 b/d, month 2 is 370 b/d, and month 3 is 290 b/d (these are round numbers for the average ND Bakken/Three Forks well from Enno Peters data).
            So for August we would expect the July wells to contribute 24 kb/d to legacy decline and the June wells to contribute 16 kb/d to legacy decline for a total of 40kb/d. About another 30 kb/d of the legacy decline comes from all other wells which started producing in May 2014 or earlier. I am sure that you understand all this, but I want others to be able to follow this as well.

            Now you have said several times (possibly in bold print) that the new wells don’t matter for legacy decline, but of course that is only true in their first month of production.

            Let’s consider an alternative scenario where only 100 new wells were completed in the ND Bakken/Three Forks in June and July, clearly output would have been lower in June and July, in June output would have been 49 kb/d lower and in July the output would have been 86 kb/d lower except that the legacy decline in July would be 12 kb/d less than the previous case so July output would be 74 kb/d less than the first case.

            What about legacy decline in August?
            The contribution from the June and July wells would be half of the previous case or 20 kb/d and the total legacy decline would be about 50 kb/d (20 kb/d lower than the first case.)

            What about legacy decline rates in these two cases?
            The first case is close to the real case with July output for the ND Bakken/TF at 1050 kb/d so the rate is 70/1050 or 6.7%.

            For the second case July output would be 976 kb/d so the legacy decline rate is 50/976 or 5.1%.

        • Dennis Coyne says:

          For comparison a model with similar assumptions as above with 150 new wells added per month from Sept 2014 to Sept 2020. Output rises after Jan 2015.

          • Dennis, we seem to be arguing about how many wells it would take to keep production flat. Your first chart shows new wells per month keeping production flat and 150 additional wells per month just barely increasing production.

            If your first chart is correct then your second chart is incorrect because if 117 is the number of of wells required to keep production flat then with 150 wells added per month production would increase rather sharply at first, then slower until it production flattened off at some higher level.

            You see Dennis any number of new wells, if that exact number of wells remained constant, and production per well did not change, then you will eventually reach a point where production would level out and stay constant at that point.

            But of course that will not happen because the sweet spots will eventually play out and production per new well will start to drop. But the number required to keep production constant right now, at 1,110,000 barrels per day, is somewhere between 150 and 170, according to my best guess. At any rate 117 is way, way too few.

            But… if they keep drilling at 180 t0 220 new wells per month, then production will continue to increase until it reaches a point where that number, 200 new wells or so per month, will keep production flat.

            • Dennis Coyne says:

              Hi Ron,

              Both charts are correct. The charts are for North Dakota Bakken/Three Forks output only, Montana is not included.

              In the chart with 117 wells the production decreases at first to about 950 kb/d and then rises back to a little over 1000 kb/d by 2020.

              The chart with 150 new wells per month keeps production pretty close to 1000 kb/d until 2015 and then output increases.

              You are correct that new well EUR will decrease in the future, but we do not know when that will occur, and we do not know how fast the decrease will be. Your guesses may be best, time will tell.

              To play with the model it can be downloaded at the link below,
              to change the number of wells added just change cell D1:


          • Dennis Coyne says:

            At the bottom of the thread I present a scenario where 150 new wells per month are added initially, but assume new well EUR decreases and add the economic assumptions needed to determine if the wells are profitable. as the expected profitability of the average new well decreases the rate that new wells are added decreases. Oil prices gradually rise after July 2015 at a rate consistent with the EIA’s AEO reference scenario. The slower drilling rate decreases the rate that new well EUR decreases because the sweeter drilling locations get drilled up more slowly as fewer new wells are added.

        • Dennis Coyne says:

          Hi Ron,

          Chart below with 3 cases of wells added from Oct 2014 to Sept 2020
          at 120 new wells per month, 150 new wells per month and 180 new wells per month over that 6 year period. For simplicity no change in new well EUR is assumed over that period (I expect this assumption to be violated by 2016 at the latest). The 120 well/month case is also 1440 wells per year, similar to David Hughes 1400 wells/year to keep output from falling (it does in fact fall about 7% and then rises back to present output levels.)

    • Ilambiquated says:

      The website eats my comment if I push the right CTRL button 🙁

      Total output for 90 days 544*90=48960
      Total output for 30 days 758*30=22740

      Daily output last 60 days (48960-22740)/60=437

      First approximation of decrease 1-(437/758)=43%

      Minimum output Day 30=437.

      • Ilambiquated says:




        x= 8.1

        So you could have 8 days at 1631 and drop to 437 for the rest of the 82 days.

        • Ilambiquated says:

          If the 1631 rate only lasts 1 day you have 784 for the rest of the month.

  7. Doug Leighton says:

    Pope Francis warns on ‘piecemeal World War III’

    “A “piecemeal” World War III may have already begun with the current spate of crimes, massacres and destruction, Pope Francis has warned.”

    Interesting Thought!

    • Longtimber says:

      Trying to get my head around the utility of these LTO fluids for things other than Dilbit.

      “Much of the volume of liquid being produced in the Eagle Ford Shale is actually condensate, or petroleum liquids greater than 45 API gravity. That’s largely due to the fact that oil and gas exploration companies haven’t quite figured out the right formula for extracting heavier liquids from shale.”

      So the US imports crude to harvest LTO liquids. Does LTO have a definition? Can it be said that Refinery capacity in the US make little Significant volumes of Diesel from LTO? But we export Diesel to Europe. Is this quantified in anywhere? What is the minimum API practical for making Diesel for US refineries? Rather import for us carbon based units that like to eat.

      • Jeffrey J. Brown says:

        Check out the enormous drop in distillate yields in just going from 39 API gravity crude to 42 API gravity crude:

        Source article:

        • Watcher says:

          That is the most powerful diagram of this year. SOOOO much obfuscation. The diesel content is crapola.

          The digging I did found articles about refinery difficulties dealing with huge variances out of the shale sources not just in API but also in metal content. The refineries don’t know from one train car to the next what they are going to be processing and that doesn’t work. For this light stuff they have to “Tune” things to get it to refine. If they have to go thru every train car to find the stuff the works with the present tuning, that costs money.

          • Jeffrey J. Brown says:

            Also, there is a significant difference between true 35 API gravity crude and a blend of heavy oil cut with condensate that is technically 35 API gravity crude, but it doesn’t have nearly the same distillate yield as true 35 API gravity crude from a singe crude oil source.

        • Longtimber says:

          Wow, API is basically a measurement of mass flow rates at fixed conditions. I know from Polymer engineering/experience that HydroCarbon chains ie. Polymers physical properties go radically non-linear as you approach certain thresholds, Tiny incremental changes in molecular weight result in fantastic changes in physical strength, but again ONLY as you approach certain thresholds. A bit further you can not extrude or mold the HC polymer since the mechanical energy inputs required also go astronomical.
          So there must be orders of magnitude in the Utility of various crudes.

          • Watcher says:

            The fastest growing segment of “oil consumption” globally is diesel. It boggles the mind how these folks that want to approve crude exports from the US think that anyone is going to want non diesel bearing oil.

            Classic phrase . . . a barrel of Libyan oil will yield 3X the diesel that a barrel of Saudi Arabian oil will yield.

          • DrTskoul says:

            API is a measure of density

            • Doug Leighton says:

              API stands for the American Petroleum Institute. One of the standards that the API has set is the method used for measuring the density of petroleum: This is called the API gravity. API gravity is nothing more than the standard specific gravity used by the oil industry.

              API gravity is calculated using the specific gravity of an oil, which is nothing more than the ratio of its density to that of water. Specific gravity for API calculations is determined at 60 degrees Fahrenheit. API gravity is found as follows:

              API gravity = (141.5/Specific Gravity) – 131.5

              Though API values do not have units, they are often referred to as degrees. So the API gravity of West Texas Intermediate is said to be 39.6 degrees. API gravity moves inversely to density, which means the denser an oil is, the lower its API gravity will be. An API of 10 is equivalent to water, which means any oil with an API above 10 will float on water while any with an API below 10 will sink.

              And, the API gravity is used to classify oils as light, medium, heavy, or extra heavy. As the “weight” of an oil is the largest determinant of its market value, API gravity is exceptionally important. The API values for each “weight” are as follows:

              Light – API > 31.1
              Medium – API between 22.3 and 31.1
              Heavy – API < 22.3
              Extra Heavy – API < 10.0

      • Watcher says:

        The data of that is 5/2013 and there was a guy who posted here sometime ago about definitions as regards what is condensate and what is something else — and the numbers got redefined because apparently Texas defines condensate when it comes from a gas well vs crude when it comes from an oil well, for the same API.

        Something like that.

        They may not have been calibrated on this in May 2013.

        • No, that just don’t sound right. Condensate is mostly pentane. You cannot define it as crude just because it comes from an oil well. But… just how much condensate would you get from an oil well? What is the boiling temperature of pentane? If it is higher than the temperature of the oil when it comes out of the ground then it would be a liquid that mixes with the crude and could only be separated at the refinery.

          However there is a strip of Eagle ford, right down the middle, that produces mostly condensate.

          • notanoilman says:

            9-36C depending on the isomers. My suspicion is that the isomer mix may be very different in gas well condensate and oil wells. Any oil guys able to confirm or deny this?


          • Watcher says:

            It MAY have been Rockman. The guy who showed up and laid it all out. Or maybe someone else. It was maybe a month or so ago.

            Can comments be searched for “gas well”. Might be an easier search than condensate.

            Just tried a search and everything froze.

            • Cóilín Nunan says:

              I think this is the Rockman comment you were looking for:

              “I try to avoid this subject. There is no short and simple answer. So here are the words directly from the TRRC:

              Condensate is defined by some as a hydrocarbon liquid produced AT AN OIL OR GAS WELL and having American Petroleum Institute (API) gravity greater than 40 degrees. The API gravity of oil/condensate can vary from 20 to 70 degrees. In practice most producers do not distinguish between oil and condensate, calling any liquid petroleum “oil”. The TRRC handles the distinction very differently and distinguishes between them thusly: oil being the liquid produced from “oil wells” and condensate being the liquid produced from “gas wells”.

              Simple enough…not. LOL. So as far as gravity goes that doesn’t define the definition in Texas. IOW an oil well producing 40 degree API liquid is producing oil. And a NG well producing 40 degree gravity liquid is producing condensate. And a critical aspect: that’s how it is reported.

              So the next issue is the definition of oil and gas wells. So again by TRRC regs:

              Gas well– Any well:
              (A) which produces natural gas not associated or blended with crude petroleum oil at the time of production;

              (B) which produces more than 100,000 cubic feet of natural gas to each barrel of crude petroleum oil from the same producing horizon; or

              (C) which produces natural gas from a formation or producing horizon productive of gas only encountered in a wellbore through which crude petroleum oil also is produced through the inside of another string of casing or tubing. A well which produces hydrocarbon liquids, a part of which is formed by a condensation from a gas phase and a part of which is crude petroleum oil, shall be classified as a gas well unless there is produced one barrel or more of crude petroleum oil per 100,000 cubic feet of natural gas; and that the term “crude petroleum oil” shall not be construed to mean any liquid hydrocarbon mixture or portion thereof which is not in the liquid phase in the reservoir, removed from the reservoir in such liquid phase, and obtained at the surface as such.

              And the simple definition of an oil well: it doesn’t qualify for the gas well designation.

              And now the even more confusing aspect: the TRRC focuses on the phase (liquid or gaseous) of the hydrocarbon as it exists in the reservoir and not what’s coming out of the well head. And that’s a function of temperature and pressure. And this is why I dislike going into area. A well may be producing a liquid hydrocarbon initially classified as condensate by the TTRC. But as the reservoir pressure declines (very common in the shale plays) the hydrocarbon phase can change from gaseous to liquid in the reservoir (often called the bubble point). This reservoir pressure/phase change can be calculated. So at some point the operator can apply for a status change from a gas well to an oil well. This is not a minor technical issue. It has huge financial implications. The TRRC has very clear rules on the spacing of wells, how close they can or can’t be drilled to the lease line and how much acreage can be assigned to a producing well. And that hinges on whether it’s classified as an oil or gas well.

              IOW a well initially classified as gas/condensate might hold a 320 acre producing unit…and only that one well can produce from that reservoir in that producing unit. But if it’s eventually reclassified as an oil well the acreage assignment could be reduced to 80 acres. So now the 240 acre balance (320 – 80) can be drilled and produced by additional drilling.

              I’ll stop now since I’m sure I’ve completely muddied the waters. Especially since I’ve left out even more details and complications. All the details can be found at the voluminous TRRC website. But be forewarned: it isn’t an east read for me and I’ve been doing it for 4 decades. Which also explains why there are many consultant companies in Austin that get paid nice fees to help even experienced operators thru the maze. And lawyers who specialize busting companies that don’t get it exactly right.

              And if you find this confusing and frustrating just drop a line to the commissioners. They really enjoy constructive criticism.”

              • Doug Leighton says:

                This is an excellent summary that will hopefully reduce a lot of generalizations that keep reappearing. We seem live in a world of Wikipedia experts but you don’t become a Petroleum Engineer (or whatever) by surfing the internet for an hour and Cóilín Nunan’s post clearly demonstrates this. Thank you Cóilín.

                • Cóilín Nunan says:

                  Actually, it’s Rockman’s post from nearly three months ago. So thanks should go to him.

                  • Watcher says:

                    Nunan is The Man.

                    “The TRRC handles the distinction very differently and distinguishes between them thusly: oil being the liquid produced from “oil wells” and condensate being the liquid produced from “gas wells”. ”

                    Followed by Ron’s point:

                    “And now the even more confusing aspect: the TRRC focuses on the phase (liquid or gaseous) of the hydrocarbon as it exists in the reservoir and not what’s coming out of the well head. And that’s a function of temperature and pressure. And this is why I dislike going into area. A well may be producing a liquid hydrocarbon initially classified as condensate by the TTRC. But as the reservoir pressure declines (very common in the shale plays) the hydrocarbon phase can change from gaseous to liquid in the reservoir (often called the bubble point). This reservoir pressure/phase change can be calculated. So at some point the operator can apply for a status change from a gas well to an oil well. ”

                    I think Dennis did some plotting of data showing a ramp up of oil vs condensate coming out of Texas. We can see here this could be not a lot more than redefinition of wells.

              • Synapsid says:

                Thanks Coilin. That’s the post.

                Sorry for the lack of marks. Is yours the Irish name usually spelled Colin in English? Or the one spelled Colleen? (I thought that one was “cailin”.)

                Spelling in the Gaelic is a rich mystery.

                • Cóilín Nunan says:

                  An accent in Irish is called a fada, which means long as it makes the vowel long. You can put a fada on any vowel by holding down the Alt Gr key as you press the key for the vowel

                  Cóilín is an Irish male name that doesn’t have any exact translation into English. The first i is not pronounced, and the o and the second i are pronounced as long vowels. So the Cói bit is pronounced to rhyme with Joe in English and the lín bit is pronounced like the English word lean.

            • Jeffrey J. Brown says:

              Following is an excerpt from a 2012 RBN Energy article. The simplest way to think of condensate is that it, like NGL’s, a byproduct of natural gas production.


              You can get a lot of definitions for condensates.  Schlumberger has the following description on their website:  “A low-density, high-API gravity liquid hydrocarbon phase that generally occurs in association with natural gas. Its presence as a liquid phase depends on temperature and pressure conditions in the reservoir allowing condensation of liquid from vapor.”  Let’s translate that.  Condensates generally come along with natural gas.  They can be either a liquid or a gas depending on temperature and pressure.  Generally field production moves through separators and stabilizers that allow condensates to ‘fall out’ of the gas at something around ambient temperatures and pressures.   In addition, condensates are produced out of the well in liquid phase.

              The liquid condensate is a very light hydrocarbon, somewhere between 45 and 75 API gravity.  (WTI is about 39 API, Brent 35 API, motor gasoline mid-50’s API.)  The official delineation between a condensate and a crude oil is 45 API.  So this stuff is a highly volatile mixture of natural gas liquids (very high API numbers), naphtha range materials (like gasoline) and a variety of other cats and dogs.    You can run your tractor on a very clean condensate.

              Because condensates have such a high percentage composition of light-ends (like NGLs and light naphthas) they require special storage and logistical equipment.   The NGL components can easily transition back to a vapor state, which means condensates must be handled carefully.

              There are three primary markets for condensates: (a) sale as crude oil, (b) sale as diluent for heavy crude blending, and (c) processing in a splitter and sold as component products.

              In many situations, the preferred market for the producer is a crude oil sale.  It requires the least special handling.  Condensate is blended with a heaver crude oil (say something in the 30-35 degree API range), which raises the average API gravity of the blend.  Higher gravity (lighter) crude oil usually commands a higher price.  But when condensates are involved, it can work the other way.  Refiners learned long ago that a crude oil blend that has been spiked with a light condensate has a large portion of lower value NGLs (relative to gasoline), and lots of light naphthas in the gasoline range.  …Little or no yield of distillates – which make diesel and jet fuel – and are what refiners are making most of their money on these days.  So refiners create pricing formulas (called gravity banks or bend-over pricing provisions) that compute a lower price for crudes containing a high portion of light condensates.  In other words, refiners discount the price they will pay for a crude-condensate blend.

              • Doug Leighton says:

                Ditto from above: Thanks for posting this Jeff.

              • Watcher says:

                I hope those lurkers out there are focused on this little comment sequence. You can declare water to be oil and get celebration numbers, but the refineries know the score and it’s not headed for victory.

    • Mike says:

      There is a lot of talk about WW3. All nonsense. WWi lasted four years, involved most of the coutries of the world, was fought in Europe, the Middle East, and Cental-East Africa, saw 9+ million deaths, and was fought by all of the Great Powers of the time – Germany, Britain, France, Austria-Hungary, USA, Russia, Turkey, Italy plus India, Australia, Canada NZ, Japan etc etc. The Second WW was on a vaster scale and fought intensively on inEurope, Asia and the Pacific, on the borders of India, near Australia,, seabattles of the coast of South America, submarines in every ocean of the globe and perhaps 60 million deaths, probably more. Zeppelins bombed British cities in WW1, in WW Rotterdam, London, Glasgow (even neutral Dublin) Paris Rome were bombed from the air, while Hamburg, the Ruhr, Tokyo, Osaka, Dresden Hiroshima and Nagasaki were near obliterated.In both wars, the economies of all the major combatants were turned to fighting the wars, producing armamnents, conscripting the total available manpower int ovast armies and navies. Millions of tons of shipping were sunk. What people are calling WW3 are a series of headline grabbing scattered small wars confined to various isolated locations between Afghanistan and Libya. The scale of the military forces involved, the spread of countries actively sending men and materiel, and the size of the populations afflicted by the fighting is tiny compared with e.g. what happened at say the Somme (50.000 casualties in the first day of fightiong, or Verdun, or Stalingrad, or Kohima. WW3 this is not.

      • Doug Leighton says:

        Well yes but: “For the first time since the Second World War era, the number of people forced from their homes worldwide has surged past 50 million, the United Nations refugee agency said Friday.”

      • Petro says:

        …coming bro…just because something hasnt happened ..yet.. doesnt mean it will not…you are seeing JUST the ouverture…stay tuned for the main act…is just a: “….saudis accept yuan/ruble for oil payment..”, or “…chinese/japanese navy boat sunk in the east china see..”, or “…russian/chinese hackers atacked and shut down nyse…”, or “…North Dacota production crashed to only 500k bpd and oil is trading at $150/b and there are longgggggggg lines and fights at every gas station ….”, or…”you put the headline here…” headline away from happening in full view for all of us to see….
        Be a little patient, will ya please??

      • Coolreit says:

        WWIII started all over the world by islam against the West. “The borders of islam are bloody”. From Iraq to Nigeria to Yemen to Syria ad nauseum!

  8. Petro says:

    have you gotten an answer how to calculate the 180d average output yet?
    Good post!
    Be well

  9. Strummer says:

    The whole “World War 3” talk is seriously overblown. Mostly it’s just small professional armies fighting against local guerillas, for whatever reason. Until there is a conflict with wide-ranging and mandatory conscription, there is no WW3. Ukraine tried it, and most of the “conscripts” simply refused or walked away. The vast majority of government soldiers are actually fanatic neo-nazi private batalllions paid by local oligarchs. There’s not going to be a large amount of people willing to fight for some fat rich asshole, those times are long over. For real WW3 to start, there would have to be tens of millions people who are: 1. hungry and desperate, with nothing to lose, 2. having access to vast amounts of modern military technology. Until those two conditions are met in one place, there will be no WW3, just these local conflicts.

    • Old farmer mac says:

      Wars have a way sometimes of getting started as playground disputes that finish up as murder among mommies.

      Not all of them of course.

      The ironic thing about nuclear weapons is that they have probably actually prevented WWIII… NO country that has them will fail to use them in extremity and there are so many political and economic alliances that no ” important ” country is not under some other more powerful countries nuclear umbrella.

      I gauran effing tee ya for example that if the relatively peaceful Obama administration could not repel an invasion of either Canada or Mexico by a European or Asian power without using a nuke or two then nukes would be used.Fortunately this particular scenario is far fetched in the extreme….

      BUT within a couple more decades at most there will almost for sure be a lot of small but very hot resource wars. Any one of them could metastasize into WWIII with bad luck.

      • Hey… we are already being invaded by Mexico and there has not even been a hint at nuking them.

        • Old farmer mac says:

          We are truly strange creatures. We would do whatever is necessary to prevent an army as such from crossing our borders , or Mexico’s borders.

          But we allow an army of individuals much bigger than any existing army to invade us with impunity.

          I expect this situation to change dramatically within another decade or so based on the assumption the economy will be headed to hell in a hand basket and that the borders will be slammed shut.

          I am a descendant of Scots highlanders but I wouldn’t want too many of them ” over here” competing with me and I strongly suspect that in the end newly minted yankees of Mexican origin will feel the same way in another decade or two.

          • clifman says:

            “We are truly strange creatures. We would do whatever is necessary to prevent an army as such from crossing our borders…”

            Indeed. It has oft been asked, by the likes of Derrick Jensen, Daniel Quinn & others, if we would stand idly by while aliens came to our planet, wrecked the ecosystem, poisoned water supplies, sucked aquifers dry, knocked the climate out of whack, etc. The answer, clearly, is no. Yet we gleefully do these very things ourselves in the name of ‘economic growth’.

    • Dave Ranning says:

      I agree.
      However those conditions are emergent, and probably in the pipeline.
      There don’t seem to be enough committed neo-nazi’s in the Ukraine to handle the separatists.

      • Now just a cotton picking minute here, are you making the claim that those who oppose a Russian takeover of the Ukraine are neo-Nazis? Obama perhaps?

        I really don’t think an ad hominem attack on those who hold a different opinion from yourself really helps your argument very much.

        • Dave Ranning says:

          I was agreeing with Strummer— most of the boots on the ground are of questionable origin:
          Until there is a conflict with wide-ranging and mandatory conscription, there is no WW3. Ukraine tried it, and most of the “conscripts” simply refused or walked away. The vast majority of government soldiers are actually fanatic neo-nazi private batalllions paid by local oligarchs. There’s not going to be a large amount of people willing to fight for some fat rich asshole, those times are long over.

          And I’m not advocating a Russian takeover.
          Disclaimer: I have a degree in Russian History, but my thesis emphasized anarchism and the revolution.
          However, the Ukraine was a major part of the Russian anarchist experience.

          As stated before, the Russian State was born in Kiev when Moscow was still a hunting camp.

        • Strummer says:

          @Ron: there is no “russian takeover”. The last thing that Russia needs are 45 million poor broke ukrainians to feed and a land that has no resources (no oil, no gas, just some coal). Russia is simply doing what the USA would be doing if for example China supported a violent bloody coup in Canada or Mexico.

          And really, the fact that the vast majority of those fighting for the ukrainian government are neo-nazi private batallions is no secret. There are reports in the Guardian, in the Telegraph, in Foreign Policy… there is almost no real “ukrainian army” fighting on the front, it’s just these guys:

          Just google “Azov”, “Aidar”, “Dnipro-1”, “Donbass” batallion, there’s plenty of information out there.

          • Kam says:

            Poroshenko was electec in free elections. And new perliment will also be pro-EU. Ukrainians now know (20 years too late) that sticking with Russia is hopeless, so they want to go west, but Putin doesn’t want to let them. Of course there are ethnic Russians in eastern Ukraine, but majority of society made it’s choice.

            • Watcher says:

              “Poroshenko was electec in free elections.”

              So was the guy in 2010 who was overthrown. And I don’t think Crimea voted in that “free election”.

    • Petro says:

      “In war, events of importance are often the result of trivial causes” – Gaivs Ivlivs CAESAR
      -I truly believe that the dude who said those words (Caesar) new a little more than us about how wars start and develop, wouldn’t you think?!?!
      Be well,

      • Watcher says:

        Caesar knew nothing of nukes or ICBMs or oil scarcity that can dictate tactics. He had no tanks.

        Wars upcoming will not look like the past. The first phase is securing oil supply so it can’t be controlled by someone who will use it to influence policy in a direction you don’t like. Phase 2 is denying flow to the enemy. Phase 3 is reducing enemy consumption via reduction of enemy population.

        That’s almost all naval and ICBMs. No thirsty tanks and boots on the ground.

        • Petro says:

          ..sure Sherlock…you got this right as well, exactly like you did calculate “accurately” the production on day 180 of ALL wells…
          -Ignorance in and of itself – anoying, but tolerable.
          -Arrogance in and of itself – anoying, but tolerable.
          -Arrogance and ignorance together…well, one gets comments and “knowledge” like yours!
          I do however, infinitely admire your: “..Caesar got it wrong…I know the exact 3 stages of the next big war and by what branch of the military will be fought…” type of atitude and thinking (well, I kind of exagerated a litle with aplying the word “thinking” to your comments since it implies high levels of organization of the abstract capable part of “Grey Matter”, but what the heck! I feel generous.).
          God speed!
          Be well.

          • Watcher says:

            I’ve been to the Sherlock Holmes museum in London. It’s pretty cool. They tried for 221b Baker St but a bank across the road already had it.

        • Inglorious says:

          We’re unlikely to see something akin what we’d call a world war again, i.e. organised armies having at one and other on a large scale. We are very likely to see conflict spreading to many regions of the world.

          North Africa (Egypt, Sudan, Libya) the Middle East (Iraq, Syria, Lebanon, Yemen and probably Iran will get it’s hands dirty), West Africa (Nigeria, Niger, Mali), Central Africa (Central African Republic, Sudan, South Sudan) and East Africa (Somalia and Kenya) have flash points built in to them which are starting to manifest. It’s quite easy to foresee and escalation and spread of conflict over the coming years rather than things quietening down.

          China’s increasing territorial ambitions (Vietnam, Philipines, Taiwan, Japan – the East China and South China Seas basically), current territorial issues (Xinjiang and Tibet although these will be simmering) and their plans to dam water supplies feeding in to a large part of the low lying areas around the Himalayas will also likely result in conflict.

          Europe will be facing off with Russia for a while to come as both play the Great Game to influence the little players around them – lots of skirmishes to come with a small chance of a full conflict between the two emerging.

          Both Europe and the U.S will be undergoing increasing migration putting pressure on existing communities which although hard to see resulting in what you’d call a conflict will certainly see the emergence of extreme ideologies and civil unrest.

          Rome didn’t fall in a day – the outlying regions of our empires (or what were our empires) are experiencing decay and little by little will effect the core.

          • Watcher says:

            Ya pretty much that.

            You have to realize what officer training looks like. There are discussions and analyses of old battles and what had to be done to achieve victory, and it is victory that earns medals and a place in the next generation of cadets text books.

            A war spent sinking tankers and carefully avoiding killing either civilians OR armies is just not how thinking works in guys ready to be heroes, but that’s how you defeat enemies who need oil. You let starvation set in. You achieve your goal of dictating their policies by specifically NOT killing them, because dead people stretch their oil storage. You let them live and make them haul food from place to place and when they can’t do that anymore, they surrender.

          • Ilambiquated says:

            Despite all the noise on TV, the world is getting more peaceful all the time. ISI is harmless compared to the carnage the Americans were causing just a few years ago, and that was small compared to the Iran-Iraq war in the 80s.

  10. Old farmer mac says:

    This link contains some good info on the current status and possible future status of tar sands technologies.

    I would not want to invest money on any of these schemes just yet, if I had any , but one or another of them is apt to work out to some extent.

    If a small nuke could be built that runs at a high enough temperature it could be a very effective means of getting out the bitumen. The heat usually thrown off as a dead loss with cooling towers could be used to preheat or even heat the buried bitumen with the generated electricity used to finish up the job and run the processing plants and drive pipeline pumps and support the local economy.

    There is no doubt the resource is sufficient to justify the investment over the lifetime of nuke and there will be a more extensive local economy as time passes. And all that gas can be shipped out with the synbit…. and sold…

    My personal opinion is that natural gas is going to be worth more every year in constant money based on my belief in peak oil and gas being substituted for oil on an ever increasing basis.

    Beyond that the long term production of huge amounts of Fracked gas is not a given in my estimation. It may be there;I do not dispute that.

    But getting it out might prove to be so costly that the price of it keeps going up to whatever the market can stand before demand destruction kills production.

    • Ovi says:

      This article is about improving the efficiency of current methods for producing the oil. This is not an article about new companies trying new ideas on how to extract the oil. There are four major players in this field that are large cap companies listed on the NYSE that pay nice dividends. They are Canadian Natural Resources (CNQ), Cenovus (CVE), Imperial Oil (IMO) and Suncor (SU). IMO is owned primarily by Exxon and Buffet bought into SU earlier this year. You can see the affect of Buffet starting to buy SU April by looking at the price chart of SU.

    • wimbi says:

      Hey OFM- How come all you folks here seem to just ignore that choo-choo train coming down on you called solar/wind? Sure it’s small now, but every arithmetic expert here knows what exponentials do- nothing, nothing, nothing and then-boom- everything. The lily pond is only half covered the day before it’s all covered.

      Jeff. Brown quoted the NYT about the power companies worrying about solar eating their lunch. Citigroup says coal is doomed. And nobody commented- here people go on and on about rates of decay of what has gotta decay totally, by decree of those who desire to see a livable world for the next generation.

      So, just between us hillbillies, what gives?

  11. checkitout says:

    You can determine decline rates via disbursements to mineral owners. Each month’s totals on each check stub needs to be reported for income and tax requirements. There fore if you knew each month’s totals from all royalties paid to mineral owners you can arrive at a number by adding all produced oil in each check paid to mineral owners. It will provide the answer. No guessing at all. The numbers will be real.

    • Watcher says:


      I’ve been pointing out that because of Plug and Abandon expenditure magnitude, there is incentive to report very low production from wells and pay some tiny tax on it for long periods of time rather than P&A the well and report 0, even though 0 is what is coming out because you choose to send no trucks to offload tanks because that costs money.

      Just pay the tiny tax and pay no other expenses and avoid the P&A expense, even though 0 is coming out.

  12. Jeffrey J. Brown says:

    Sun and Wind Alter Global Landscape, Leaving Utilities Behind

    Electric utility executives all over the world are watching nervously as technologies they once dismissed as irrelevant begin to threaten their long-established business plans. Fights are erupting across the United States over the future rules for renewable power. Many poor countries, once intent on building coal-fired power plants to bring electricity to their people, are discussing whether they might leapfrog the fossil age and build clean grids from the outset.

    A reckoning is at hand, and nowhere is that clearer than in Germany. Even as the country sets records nearly every month for renewable power production, the changes have devastated its utility companies, whose profits from power generation have collapsed. . . .

    The big German utilities are warning — or pleading, perhaps — that the revolution cannot be allowed to go forward without them. And outside experts say they may have a point. The Achilles’ heel of renewable power is that it is intermittent, so German utilities have had to dial their conventional power plants up and down rapidly to compensate. The plants are not necessarily profitable when operated this way, and the utilities have been threatening to shut down facilities that some analysts say the country needs as backup.
    The situation is further complicated by the government’s determination to get rid of Germany’s nuclear power stations over the next decade, the culmination of a long battle that reached its peak after the 2011 Fukushima disaster in Japan. As that plan unfolds, shutting down a source of low-emission power, Germany’s notable success in cutting greenhouse gases has stalled.

    In fact, the problems with the energiewende (pronounced in-ur-GEE-vend-uh) have multiplied so rapidly in the past couple of years that the government is now trying to slow down the transition. “I think we need a little bit of time,” said Jochen Flasbarth, a deputy minister of the environment.

      • Watcher says:

        “The Ukrainian government will try to offset the shortfall by lowering heating temperatures for residential users, by reducing supplies to industry and by replacing gas with other kinds of fuel, the minister added. ”

        And by agreeing to a ceasefire deal widely decried as surrender.

        And by agreeing to further concessions to the Russians whilst declaring victory.

        And by selling assets to pay their bills.

        • Ilambiquated says:

          The Ukraine is one of the world’s most energy intensive economies. It is part of the Soviet legacy, and the Russians have been perpetuating it with cheap gas, because cheap gas gives Russia control over the Ukraine. The Ukrainian government should have started getting this monkey off its back 20 years ago, but better late than never.

    • Old farmer mac says:

      I personally believe the case for sun and wind are so compelling given depletion of fossil fuels and rising prices and shortages of foreign exchange with which to pay for them that in another ten years most importing countries will find themselves compelled to force the transition to win and solar on a war time like basis.

      Existing fossil fuel fired generating capacity can be used for load balancing and shut down to conserve foreign exchange funds to the maximum extent possible.

      And using intermittent power is more of a nuisance than an impossibility. Lots of loads can be run on intermittent power once the decision to do so is made including domestic hot water and refrigeration for instance.Building the appliances to do so will cost a little more but this will save megabucks over a few years time in avoided fuel purchases.

      • wimbi says:

        Right. I put in 10kW of solar and went to all electric everything in my house. Put solar switches on fridge, water heat pump, solar water preheater, freezer, so they only run when sunny or at least not dark. Works fine, everything coasts overnight no problem.

        Same with the electric induction stove except wife is the switch. Same with Leaf car.

        No oil, no propane, no electric bill, and more comfortable. Am spreading the word- easy, better, and for DIYs, more fun. Everybody should join the club.

  13. Ovi Colavincenzo has done some work with the Emerald Oil wells and has asked me to post them. All the below is his work:

    I have fitted an Arps Hyperbolic to three of the Emerald Oil wells, Caper 1, Mongoose 1 and Talon 1. A least squares approach was used on these three wells. The error between the average production provided by Emerald oil and the Arps function projection was minimized using the solver function in Excel (Mac0. The chart for each of these is shown below. The first two points on the Arps production rate curve are for t = 0 and t = 1 day (24 hrs). I did this since the initial decline rate is so high. Note that the total production at the end of the first day is in the middle of the first two points on Arps Prod Rate curve.The Arps function was projected out to one year to get the first year decline rates and are as follows: Caper 1, 89.9; Mongoose 1, 80.7; Talon 1, 80.4%. Going beyond one year is risky with so few data points.

    Note that the straight lines are put in by Excel and do not imply linear interpolation.
     photo EmraldGraphic_zpse96a4e2e.png
     photo EmraldGraphic2_zpsa84d0a2b.png
     photo EmraldGraphic3_zpsbc3e62f1.png

  14. Those decline rates are alarming and look a lot worse than what the Drilling Productivity Report states. But this decline is from the first 24 hours production. The Drilling Productivity Report legacy decline rates are the overall decline rate of all the wells in the Bakken, or North Dakota, that were in production from the previous month back.

    • Ovi says:

      That’s right Ron. The declines posted are relative to the first 24 hours. Using the more traditional way, last period vs first period, the decline rates are not as severe. Using the last 30 days relative to the first thirty days, the decline rates are as follows, Caper 1, 78.8%; Montgoose 1, 66.4%; Talon 1, 67.6%. A drop of 11% to 14% relative to original declines posted above.

      • That is still a lot higher than the Drilling Productivity Report’s legacy decline rate. But then this is first year decline where their legacy decline rate is for all wells in the field regardless of age.

        • Ovi says:

          Hughes reports a 71% decline for Bakken wells, which is less than Caper but higher than Mongoose and Talon. It make me wonder whether Caper is an exceptional well since its initial rate was very high.

        • Watcher says:

          Yeah, it is.

          Gotta wonder what was done on these chokes. Maybe they were making no attempt to stretch the well.

  15. Guys, I just deleted a spam message that contained the following:

    It is due to the 100 years ample supply of Bakken oil that Barons Group is in the Dicksinon community building a transforming infrastructure to be use there by the non stopping population growth of oil workers and associates…

    God will surely bless and favors the Barons Group of Companies and all they do will prosper for His Glory! Amen.

    All the rest of the post was soliciting investors. They need money.

    • RalphW says:

      It seems some spammers don’t know when to quit.

    • Doug, I had to remove your post before I deleted the spam because if I delete spam but leave the replies to it screws up the comments for the rest of that post.

      • Doug Leighton says:

        Ron, understood, no need to explain. I was happy enough just seeing that the morning trash was removed so quickly/efficiently.

      • Jeffrey J. Brown says:

        This guy is certainly persistent. Time to bid him farewell permanently?

        • Barons Group says:

          Dear Sir:

          Please explain me then where the new development opportunities in the Bakken shale oil region can be discussed? It is not here? I will go away then. Thank You.

          • Jeffrey J. Brown says:

            It’s not my blog, but I don’t think it’s my, or our, responsibility to help you raise money. So, to be blunt, I really don’t care where you go.

            • Barons Group says:

              Dear Sir:

              The only reason I mention is because I see this blog talk about the Bakken Shale oil. If the opportunitys for the development and investment to this world changing miraculous Bakken oil discovery are not in a welcome place in this blog, then site owner must write the disclaimer in the postings. He confused many people thinking this is good place to announce the Billions in USD being invest in housing & retail projects in the economic miracle boomtown North Dakota. Thank you.

              • Watcher says:

                I think you are not quite aligning your thoughts as to the difference between geology and real estate.

                Most interest here is in geology.

          • Doug Leighton says:

            Actually, since you claim have a connection to some god, perhaps he/she will provide you with the guidance you need.

    • Barons Group says:

      Dear Sir:

      Why do you not allow the Barons Group of Companies of Singapore to mention the major project it develops in Dickinson North Dakota? This is a blog about miraculous discovery of the Bakken shale oil, no? Our company is participating in this Bakken economic miracle, along with other property developers with international presence including North Dakota Developments, LLC and North Dakota 4 LLC.

      Our own project from the Barons Group of Companies mentioned many times in Dickinson community newspaper. It is a legitimate project with much of a community support. Many in the Dickinson Community are very excited to see such high impacts project to support the 100 years Bakken oil supply in this region.

      • This is a blog about miraculous discovery of the Bakken shale oil, no?

        No is correct. This is not a blog about any miraculous discovery. This is a peak oil blog. There was no miraculous discover of oil in the Bakken. We have known about that oil for over 60 years. It is light tight oil that is very, very expensive to recover and only recently has the price of oil been expensive enough to make it economical to recover.

        And there is no 100 years supply of Bakken oil! Production in the Bakken will peak in less than two years and will decline rather sharply after that. Therefore anyone who invest in long term infrastructure in the Bakken area, expecting there to be long term growth in the area will lose their investment!

        This is not an investment blog, but if it were, I would be doing my readers a great disservice by allowing a comment that promises them a profit while I know it to be a losing investment proposal.

      • Byron Walter says:

        The amount of oil coming out of the Bakken in a hundred years will not be enough to cover a tossed salad. I’m guessing that the Bakken will be the classic boom/bust with the ‘bust’ part coming sooner rather than later.

        Like some of the other folks around here, I make my pocket change on oil stocks but I wouldn’t put a penny in the Bakken.

    • Barons Group says:

      The article say so to…

      Foreign Firms Investing $800 Million In North Dakota Despite Population Uncertainty

      Foreign firms plan to spend more than $800 million in the remote oil towns of North Dakota to build shopping malls, restaurants and homes, even though there’s little evidence that workers and their families will move to the area and stay.

      A rapidly growing, highly paid population has produced a shortage in housing and retail space in the area atop the Bakken oil field that with hydraulic fracturing technologies has boosted incomes and employment in the state.

      SelectUSA, a government foreign investment initiative, said North Dakota has attracted at least 31 publicly announced foreign investment projects since 2003 worth $1.04 billion.

      • Despite Population Uncertainty

        That means buyer beware. Anyone who makes any kind of long term investment in Bakken real estate is a goddamn fool and that includes the Barons group.

      • Watcher says:

        Singapore is one of the best cities I’ve been in.

        Nobody living there would enjoy North Dakota. Nobody. Check the winter weather.

  16. Jeffrey J. Brown says:

    Interesting article by Roger Baker follows. Also shown is an EIA graph from the article showing the gap between expenditures and income for major oil companies.

    America: You’ve got three more years to 
drive normally!
    By Roger Baker

    EIA Graph:

    Given the narrowing margin between the price floor, that oil companies need in order to maintain current supply, and the price ceiling, that consumers can afford, in order to maintain current demand, it occurs to me that both producers and consumers are relying on debt to maintain supply and demand (especially central bank injections of liquidity on the demand side).

    Following is a graph showing the GNE/CNI Ratio versus total global public debt from 2002 to 2012. The declining GNE/CNI trend continued in 2013, although there were some revisions to prior years. And of course, global public debt continued to increase, up to $52 Trillion in 2013. Currently, the EIA shows that the GNE/CNI Ratio fell from 5.3 in 2012 to 5.0 in 2013.

    • Doug Leighton says:

      Jeff, I agree, the article by Roger Baker is both interesting and comprehensive: excellent summary. How do you manage to keep coming up with all this stuff?

      • Jeffrey J. Brown says:

        One could argue that central banks are in effect funding both sides of the war, in that they are doing Quantitative Easing (QE), which keeps government spending up (thus stimulating the economy), and keeps oil demand higher than it would have otherwise been, and it keeps interest rate low.

        Given low interest rates, investors are desperate for yield and they are only happy to fund the shale players, via debt and equity investments.

        • Watcher says:

          Just as an FYI, it has been suggested that the Sequester and decrease in US govt spending (or spending growth) has resulted in the lower deficit — which provides fewer bonds issued and thus fewer available for purchase by the Fed — and thus the tapering and ending of QE has not a lot to do with better economy.

          Rather, they have to stop buying bonds because there are none available to buy.

          • Jeffrey J. Brown says:

            An interesting chart would be total global oil and gas company debt from 2002 to 2013, versus the total global public debt chart.

    • Techsan says:

      Price floor, that producers need to maintain supply, is easy to understand and accept.

      Price ceiling, that consumers can afford, is problematic. There is no such ceiling. Americans waste a vast amount of oil, and there are many alternatives. If oil goes up to $500, a carpool of 5 people costs the same as driving alone at $100. Less convenient, perhaps, but still affordable. If the oil price rises, there will be a painful readjustment, but life will go on. OFM has told us he will pay an extreme price for tractor diesel before he will substitute a mule. We will still use oil at high prices for the essential things, and will choose alternatives for others.

      A sudden price spike (certainly possible) will be traumatic by stranding a lot of capital assets. Given a gradual increase, even (say) $300 by 2020, I think we will adapt surprisingly well.

      • wimbi says:

        Absolutely. People here forget what I see every day in this poor hill country- lotsa people here know how to live on junk, which, because this country is so wasteful, is a rich resource indeed and real easy to live on.

        I hired one of those junk genius types to help me with my hobby of R&D, and he keeps dragging in amazing stuff- brand new exercise machines with really good DC motors on them are one of the more common, lots of useful stuff on an un-exercised exercise machine- a beautiful exemplar of this great economy that all us oil slurpers are working so hard to keep slurping.

        Table fans, things with good bearings and wheels, any kind of heat exchanger, pressure tanks and so on and on and on,

        Anybody wanna buy a good junk-generated gasifier that takes plastics, anything organic and turns it into bargain diesel for OFM up there?

  17. Dennis Coyne says:

    I presented a couple of models above where no decrease in new well EUR was assumed.
    This was because we do not know when such a decrease will occur or how fast the EUR will decrease once it begins.

    So I will guess.

    To date there is very little evidence that there has been any decrease in the average new well EUR in the North Dakota Bakken, so I will assume such a decrease will begin in June 2015. This choice is arbitrary, it may happen sooner or later than this. In the past I have assumed that the rate of decrease will ramp up from zero to some maximum rate at the chosen rate that new wells are added (in this case 150 new wells per month.) I consider a 12 month period for this ramp up in the rate of decrease of new well EUR to be fairly quick, but others have thought this to be much too slow.

    The rate of decrease in new well EUR starts at zero (the rate from 2008 to 2014) in June 2015 and it increases to a 12% annual rate of decrease after 6 months.

    With no consideration of profitability and if 150 new wells were added each month from Sept 2014 until Sept 2030 there would be about 38,000 producing wells and about 6 Gb of oil would be produced by Dec 2030.

    When we add reasonable economic assumptions and assume only wells are completed that on average are expected to be profitable, then only 20,000 wells are completed, 5 Gb of oil is produced by Dec 2030 and the rate that new wells are added slows down in Nov 2017 by 3 wells per month until June 2020 (rate down to 54 new wells per month) and then by 2 wells per month until Dec 2021 (rate falls to 18 new wells per month) and then to 17 wells per month in Jan 2022 and remains at this rate until Dec 2030 when no more wells are added. The average new well EUR is 320 kb in June 2015 and falls to 164 kb in Sept 2030. Chart below shows the scenario.

    • Watcher says:

      “To date there is very little evidence that there has been any decrease in the average new well EUR in the North Dakota Bakken”

      Didn’t we just go thru this. There are almost no “new wells” flowing down to 0. Until they reach 0 you have no measurement of EUR. So ya, there is no evidence of a decrease in EUR. There is also no evidence of constant EUR or increasing EUR.

      There is no evidence of anything.

  18. Verwimp says:

    Today I had the honour to speak for a public, consisting of ecological farmers. The green type of people. I addressed Peak-oil, ofcourse. The audience was flattened. There was no applause afterwards. Notwithstanding that, there were a lot of interesting questions. A debate. That’s the way I like it. I triggered the wake up call for some people.

    • aws. says:

      Well done, it’s not easy getting people to think about the uncomfortable.

    • wimbi says:

      Great work! I have found that around here, a little bit of drum beating and a lot of people march in. In a few hours we are having a mob of them at our town library to talk about getting serious about getting off carbon right here and right now. It happened that the NYT had a front page story about -surprise,surprise, it wouldn’t cost much if anything to do it- yet another voice with that same song.

      So how come so many people just keep harping on cost when
      1) there isn’t much if any
      2) the cost of NOT getting off is the biosphere. Now THERE’S a cost for real.

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  20. Old farmer mac says:

    What to make of this article?

    I suspect it is mostly factual but cherry picked to the max.

    • Behind a pay wall but available via Google. Just put the title of the article in your search box.

      Fracking Gives U.S. Energy Boom Plenty of Room to Run

      • Old farmer mac says:

        Here’s another one worth reading.

        I wonder if the Russians may eventually just shut off oil and gas exports for a few weeks to remind the rest of the world who is in the drivers seat in this pissing contest.

        The Russians aren’t going to starve or freeze and they will find customers to buy their oil and sell them anything they can’t produce for themselves and simply must have. I can’t see that the list of ”must have ” goods is a very long one, or that there is ANYTHING on it that is truly essential to the Russians.

        If they were to actually quit exporting for a month or so it would totally fuck up the stock market and the whole world economy.

        But if it were to actually happen it might be the muggers brick upside the head of western society that finally cracks the concrete encasing the collective hollow spot where the brain supposedly is to be found.

        If I hear about it happening I am going to put every dime I have in wind and solar stocks expecting to make a killing pretty fast and expecting to get out again pdq.

        • Doug Leighton says:

          “I wonder if the Russians may eventually just shut off oil and gas exports for a few weeks to remind the rest of the world who is in the drivers seat in this pissing contest.”

          I hope the Russians aren’t reading your comments (no reason to believe they aren’t) because this scenario would IMMEDIATELY destroy the world we’ve come to know and love.

          • Anonymous says:

            Meanwhile, “The Russian rouble has fallen to a new all-time low against the US dollar amid concerns about the effect of sanctions on the country’s economy.” BBC World News

          • It would also destroy Russia as we know it. Russia is heavily dependent on revenue from oil and gas exports.

            “Since selling oil was the source of the Kremlin’s wealth, my father got the Saudis to flood the market with cheap oil. Michael Reagan said:

            Michael Reagan said:

            “Lower oil prices devalued the ruble, causing the USSR to go bankrupt, which led to perestroika and Mikhail Gorbachev and the collapse of the Soviet Empire.”

            Of course oil prices would go up if Russia stopped exporting but they would not benefit a cent because they would not be selling any oil. And if their actions caused a world depression then Russia would collapse right along with everyone else.

            Every act to increase or decrease oil production or exports has consequences to the entire world. If Russia were to take such action as to stop all exports of oil and gas would likely hurt Russia just as much as it hurt the rest of the world.

            • Doug Leighton says:

              True, but they wouldn’t cut ALL exports. And, reducing exports (or threats to do so) would put a lot of pressure on the Status Quo.

              • Doug Leighton says:

                But, to reinforce YOUR argument:Oil and gas account for about 75 percent of Russia’s exports and almost half of its total revenue.

            • Old farmer mac says:

              I don ‘ think the Russians would ever stop all or even most exports for any extended period of time for the reasons Ron mentions.

              But they wouldn’t have to in order to achieve some of their possible goals.

              It is good to see a self professed liberal democrat acknowledge that Reagan accomplished a few things.

              I am personally convinced that Russia could far more easily survive a few weeks or months or even a year without oil revenues than the oil and gas importing countries could survive without Russian oil and gas.

              War can be like chess or checkers. IF you do not care about the suffering on your own side you win as long as you are the last man standing.

              I have won and lost many a checker game with only three pieces remaining on the board just prior to the last move. Then there were only two out of the twelve original pieces of the winning color.

              And we should never make the mistake of assuming that people in charge of countries such as Russia will act in what we perceive as a rational fashion.Putin and company probably will act more or less rationally given their ambitions but we have no way of knowing just how many risks they are willing to run.

              • Doug Leighton says:

                Yes, and we mustn’t forget that Russians may be bullies but they’re also (excellent) chess players.

              • It is good to see a self professed liberal democrat acknowledge that Reagan accomplished a few things.

                Mac, I would never deny that some good things were accomplished by all republican presidents. Likewise some bad decisions were made by all democratic presidents. Just because I am a democrat does not mean that I would be so small minded that I would think all democrats were saints and all republicans were devils.

                For god’s sake, give me a little more credit than you would give the average Fox news talking head or Limbaugh ditto head who always paints all democrats as devils and all republicans as saints.

                • Old farmer mac says:

                  Sorry Ron I forgot to add the smiley face.

                  I would insert a red face if I knew how. 🙁

                  I look up to you as one of the most level headed and rational people I have the pleasure of knowing.

                  BUT you must admit that hearing a self proclaimed liberal democrat say something positive about Reagan happens about as often as finding a hundred dollar bill in the street.

                  Likewise you will hardly ever hear any self proclaimed conservative republican say anything positive about a democratic president.

                  I think of myself as a conservative but not a repuglithan and most certainly not as a tea partier although even the tea party is right about a couple of things.

                  From time to time I have something nice to say about democratic presidents.;-)

                  If the democrats run any body other than Hillary next time around I will probably vote democrat in ’16.

  21. The Wet One says:

    Well now, this isn’t positive:

    Those huge black fields are ice fields!!!

    Yowza. Time for a fresh snowfall. Apparently this black ice is caused by soot from forest fires in the Arctic.

    There’s a feedback loop I never thought of (but I’m not that imaginative). And the effect?

    “This year, Greenland’s ice sheet was the darkest Box (or anyone else) has ever measured. Box gives the stunning stats: “In 2014 the ice sheet is precisely 5.6 percent darker, producing an additional absorption of energy equivalent with roughly twice the US annual electricity consumption.”

    HOLY MOLY! That’s a lot of extra melting power being applied. Just by having dirty ice.


    • The Wet One says:

      I note that the researcher involved appears to be a bit of wildcard (or prone to expressive reactions to his findings) but still.

      Things are a changing in an alarming fashion in the Arctic. If things turn out the way they are said to occur, the Arctic is a harbinger of what is to come for the rest of us at lower latitudes in due course.

      • Doug Leighton says:

        Wet One,

        As my young Grandson might say: That’s one TOTALLY AWESOME link. My thanks for bringing this to our (especially my) attention. I expect Steve will already be aware of this?

        Cheers, Doug

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