Bakken – Page 21 – Peak Oil Barrel

What Will 2015 do for Peak Oil?

01/09/201501/10/2015 Ron Patterson 609 Comments

The Cornucopians are exuberant, they believe that collapsing of oil prices dealt the death knell for peak oil. An oil glut, they say, is what we have, not peak oil. But an oil glut is exactly what we would expect at the very peak. After all, that is what peak oil is, that is the the point in time when the world produces more oil than ever in history… and the most it ever will produce.

I am of the firm conviction that the world is at the peak of world oil production right now, or was at that point three or four months ago. I think history will show that the 12 months of September 2014 through August 2015 will be the one year peak. Whether the calendar year peak is 2014 or 2015 is the only thing still in question, or that is my opinion anyway.

The EIA says, in their Short Term Energy Outlook says US Crude oil will peak, at least temporarily, in May 2015.

Looking at the area breakdown for total US production:

This chart includes net US crude oil imports. Notice how they expect crude oil imports to bottom out in February of 2015 at 5.78 mbd then increase to 6.71 mbd in August before declining to 5.82 mbd in December.

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Bakken, Let’s Do The Math

01/05/201501/05/2015 Ron Patterson 612 Comments

There has been considerable dispute over how many new wells required to keep production flat in the Bakken and Eagle Ford. One college professor posted, over on Seeking Alpha, figures that it would take 114 rigs in the Bakken and 175 in Eagle Ford to keep production flat. He bases his analysis on David Hughes’ estimate that the legacy decline rate fir Bakken wells is 45% and 35% for Eagle Ford wells. And he says a rig can drill 18 wells a year, or about one well every 20.3 days.

The EIA has comes up with different numbers. The data for the chart below was taken from the EIA’s Drilling Productivity Report.

The EIA has current legacy decline at about 6.3% per month for Bakken wells and about 7.7% per month for Eagle Ford wells. That works out to be about 54% per year for the Bakken and 62% per year for Eagle Ford. I believe the EIA’s estimate of legacy decline, in this case, is fairly accurate. For instance last month Mountrail County had over 30 new wells completed yet still declined by 6.4%. And in December 2013 North Dakota declined by 5.22% yet had 119 new well completions.

I have examined the last sixteen Directr’s Cuts and gleaned, I think, some important data… I think.

Rig count has averaged 189 rigs per mnth and has been fairly steady while new well completions has averaged 172 wells per month but has been highly erratic.

New well completions depends far more on weather and fracking crews than rigs. In October there was 650 wells awaiting fracking crews. At 172 wells per month that is almost a four months supply. And that is also what the average spud to completion is, 120 days.

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Bakken, A Tale of Two Counties

12/26/201412/26/2014 Ron Patterson 310 Comments

North Dakota publishes their Historical Barrels of Oil Production by County which gives county by county production back to 1951. The data here does not include confidential wells but they publish the last couple of months production data that does include confidential wells here: Oil and Gas Production Report. Looking over this data I found something very strange. In October Bakken production was down by 1,598 barrels per day and all North Dakota was down by 5,4054 barrels per day.

All data is in barrels per day with the last data point October 2014.

McKenzie County was up 19,609 barrels per day or 4.88 percent. In October McKenzie was up even more than it was in September when the Bakken was up 52.5 thousand barrels per day.

Mountrail Countywas down 18,728 barrels per day or 6.42 percent. There is more on this story below.

Dunn County was down 3,527 barrels per day or 1.83 percent.
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Bakken New Wells Producing Less Confirmed

12/21/201412/21/2014 Ron Patterson 439 Comments

It is has now been confirmed. The first measured 24 hour production from Bakken wells is a very good predictor of the future production of that well. And it has also been confirmed that new wells with higher well numbers are producing a lot less.

In the NDIC’s Daily Activity Reports they publish “WELLS RELEASED FROM “TIGHT HOLE” STATUS” as well as “PRODUCING WELL COMPLETED”. By searching these two lists, then eliminating the duplicates that appear on both lists, we find that perhaps 70 to 80 percent of all wells report their first 24 hours of measured production. It is listed as “BOPD” (Barrels Oil Per Day) and “BWPD” (Barrels Water Per Day). An example below, and notice the second well listed does not give any production numbers:

The “per day” in this case is the first 24 hours of measured production and not necessarily the first 24 hours of preduction. I have collected, from this source, the data from 2,565 wells dating from November 1st 2013 to the present date. Enno Peters gathered data from several thousand Bakken wells dating from the early Bakken t mid 2014. Using the well numbers, I have managed to match 1,127 wells in my database with the same well number in Enno’s data. There were a more matches than this but had no data or incomplete data. But it was mostly because only a little over half my data overlapped his.

From his data I used the 2nd and 3rd months production data because the first month’s data was often for less than one full month. I converted his monthly data to barrels per data by dividing the monthly data by 30.417. There were sometimes great anomalies in the data so to smooth things out, on the first three charts below, I used a 50 well average. Here are the results. The horizontal and right axis is first 24 hour barrels. The “First 24hr Barrels” is a smooth line because that was the sort column.

When I sorted the data by production in the first 24 hours I found a strong correlation with the second months production. This was especially true with first 24 hour production up to 1,050 barrels. The “First 24hr Barrels” chart line is smooth of course because that is the sort index.

Sorting all wells by the second months production we see a very strong correlation to the first 24 hours of measured production.

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Texas RRC October Oil & Gas Report

12/18/201412/18/2014 Ron Patterson 350 Comments

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

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

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

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

Texas condensate production has slowed down a lot more than crude. Most Texas condensate comes from their natural gas wells but there are a some wells in the Eagle Ford that produces mostly just condensate.
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