2014 March 14

The Master Resource Report 2014-03-14

Quick look at the Bakken data just released

The North Dakota Dept. of Mineral Resources released the January production data yesterday. So here is a quick look at what it shows. Next week’s report will look at it in more detail.

The graphs below illustrate what happens when the new well additions slip. In December only 48 net new producing wells were added and in January the number only climbed back up to 92 net new wells in the Bakken. State wide the preliminary data shows a net gain of only 59 wells so the number of producing outside the Bakken declined. Production was impacted by the drop in wells and for sure by issues related to the extreme weather the state experienced. But the key point illustrated here is how vulnerable the production is to any dip in new well additions. Mother Nature has provided a glimpse of what will happen if net new well additions were to remain depressed for any period of time. It doesn’t matter whether that is caused by cold weather or a cold economy depressing capital expenditures by the companies.

Total North Dakota state wide production in January remains below the all-time high set back in November (976,453 b/d) at 933,128 b/d. This drop of 43,325 b/d or 4.5% puts the state of its anticipated pace of achieving its goal of reaching 1 million barrels per day. It will likely make the one million barrel milestone this year. However, it will require a major ramp up in net new well additions to get back on the same growth trend seen in place prior to when the weather intervened.

The first graph illustrates the number of producing wells (green) and daily oil production (red) beginning in January 2010. The second graph narrows the time period to beginning in January 2012.

North Dakota Bakken  wells-production 2014-01

Click image for larger view.