Bakken Update with January Production Numbers

Ron Patterson 261 Comments

Second Update: I am still waiting for the Texas Railroad Commission monthly update. I had hoped it would be out today. However I will have a new post out tomorrow evening, March 21, whether they update tomorrow, or not. I have some good graphs from Jean Laherrere and one from Roger Blanchard that I will post.

Okay Another Update: Dennis Coyne has just posted me the numbers and link for Texas Condensate production. Now we can finally figure out what is going on in Texas.

More tomorrow

The North Dakota January production data is out for The Bakken and All North Dakota. Bakken production was up by 6,031 bp/d to 871,672 bp/d. But that was after December production was revised up by 2,744 bp/d. All North Dakota production was up by 6,446 to 933,133 bp/d. But that was after December production was revised up by 3,460 bp/d.

Bakken Barrels Per Day

From the Director’s Cut

The drilling rig count was down from Dec to Jan and the number of well completions
dropped from 119 to 60. Days from spud to initial production decreased 10 days to 122.

Investor confidence appears to be growing. There are over 100 wells shut in for the Tioga gas plant conversion in an attempt to minimize flaring, but the biggest production impact story continues to be the weather. January temperatures were only 6 degrees below normal with only 3 days too cold for fracturing work, and there were no major snow events, but 12 days had sustained wind speeds too high for well completion work.

At the end of Jan there were about 660 wells waiting on completion services, an increase of 25.

North Dakota wells increased by 59 to 9,734 while Bakken wells increased by 92 to 6,926.

Bakken Wells

Perhaps it is just bad weather but there is definitely a slowdown in number of wells.

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The EIA’s Drilling Productivity Report, Ghana and China

Ron Patterson 59 Comments

The EIA’s latest Drilling Productivity Report has been published. I found some strange things in the report. For the Bakken, their data does not jive with that posted by North Dakota. I have plotted the two together. The North Dakota includes all North Dakota but not the Montana part of the Bakken. The EIA data includes all the Bakken but not the non-Bakken part of North Dakota. Almost a wash but not quite. Montana produces slightly more than the non-Bakken part of North Dakota, but not very much. Anyway…

EIA New Bakken Report

I thought for sure that the EIA would hear that Bakken Production was down about 50,000 barrels per day in December. But Nooooo… they have the Bakken up by over 20,000 barrels per day in December, a difference of 70,000 bp/d. But up until the last two or three months they follow the North Dakota data pretty close so we can hope they update their data in a few months.

However all LTO production was revised upward in this last report. The chart below is the barrels per day that all tight oil was revised upward.

April Revisions

Doesn’t the strange shape of that chart raise suspicions? December production was revised upward by 34,672 bp/d when it actually should have been revised downward by perhaps twice that amount. January production was revised upward by 35,243 barrels per day. I doubt very much that this was the actual case.

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Can we depend on a “Call on OPEC”, or has OPEC peaked?

Ron Patterson 278 Comments

Steve Kopits, in his recent presentation at Columbia University, ridiculed the IEA’s often used term a “Call on OPEC“. That is, the IEA looks at the world oil supply and if they see a supply shortage looming on the horizon they then issue a “Call on OPEC” to supply x number of extra barrels and fill that gap. But the next time the IEA issues such a call can OPEC deliver? Or, is OPEC already producing every barrel they possibly can.

One thing for sure, there are eight OPEC countries that are definitely producing every barrel they possibly can, those countries are Algeria, Angola, Ecuador, Iran, Libya, Nigeria, Qatar and Venezuela. The chart below is the combined production of those 8 nations.

All charts in this post are “Crude Only” in kb/d with the last data point Jan. 2014.

OPEC 8

There can be no doubt that all eight of these OPEC countries are producing every barrel they possibly can. While it is true that Iran and Libya have political problems that is holding their production back, but political problems in that part of the world are likely to get worse rather than better.

But what about the other four OPEC nations. The chart below shows the combined production of Iraq, Kuwait, Saudi Arabia and the UAE.

OPEC 4

It is my contention that not only are these four OPEC nations producing every barrel they possibly can but that they have little prospect of producing much more. I will examine each country one by one.

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EIA’s Petroleum Supply Monthly by State, Texas Reporting Problems

Ron Patterson 319 Comments

The EIA releases two monthly petroleum data sets for US oil production. The Monthly Energy Review which gives the US production and consumption of all forms of energy, oil, natural gas, coal and electricity.  The other, the Petroleum Supply Monthly deals only with petroleum but gives every possible statistic, production, refining, export and import from every state and district.

Concerning total US crude oil production the two should agree but they don’t. From December 2011 back they have the exact same production numbers but the near months differ greatly. I have found that the latter, the Petroleum Supply Monthly is the most accurate. The Monthly Energy Review usually changes their numbers to match the Petroleum Supply Monthly but both revise their numbers as more accurate numbers come in. They both are published the last week of the month but  the M.E.R is always a month ahead with their data.

Here are their the numbers in KB/d and the difference between the two.

Difference 3

Notice that the former had US production up by 333 kb/d in December while the latter had US production down by 77 kb/d in December. But both will be revised to match what each state or pad reports later on.

There is no uniform reporting strategy among different states. They all appear to do it differently and on a different time frame. For instance the PSM, which is the only one of the two that reports state by state production number, reports the exact same numbers for North Dakota that we get from North Dakota. But they get their Texas data from the Texas Rail Road Commission. And the Texas RRC is very delinquent with their reporting. They just report the numbers as they come in from the field and every month they change as more numbers come in, sometimes taking many months until all the numbers are in. So the EIA just guesses at Texas production numbers.

Texas and North Dakota daily C+C production in KB/D. The last data point is December 2013.

Texas + North Dakota

Notice the last nine months are extremely linear. In fact each month, April through December, Texas monthly crude production increased by exactly 50,000 barrels per day.
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