Category: Shale Oil

North Dakota publishes, every month, a Monthly Statistical Update  from which we can gather a wealth of data if we dig deep enough. They publish the number of spuds, that in new wells started, each month, along with the average number of rigs that month. From this we can glean the average number of days each rigs spends on each well. Spuds per Rig The last data point is March, 2015. Through 2011 a rig could drill about .75 wells per month, or about 40 days spud to spud. Today that figure is about 1.14 wells per month or about 26.3 days spud to spud. Permits & Spuds Again, the data is through March. We can see the falloff of spuds, rigs and permits in February and March. April and May should show a further decline in all three. Just how many rigs per month does it take to […]

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WILLISTON, N.D., April 30 (Reuters) – Whiting Petroleum Corp., the top oil producer in North Dakota, plans to keep 11 drilling rigs operating through 2016, though it would add "a couple of rigs" if crude prices rise to $70 a barrel, its chief executive said on Thursday. The comments from CEO Jim Volker were among the most definitive yet from a leader of a big crude producer on what threshold is needed to start fresh drilling and curb recent pullbacks that have rocked the oil sector since prices started to drop last summer. Thus far this quarter, executives at industry peers have sent mixed messages on adding new rigs. Hess Corp, for example, does not plan to add any rigs this year, while Pioneer Natural Resources Co told Reuters last week that it was considering adding rigs in the near future. Oil prices have gained more than 15 percent […]

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NEW YORK (Reuters) – U.S. oil producers are rushing to take advantage of the rebound in oil markets by locking in prices for next year and beyond, safeguarding future supplies and possibly paving the way for a rebound in production. The flurry of hedging activity in the past month will help sustain producers’ revenues even if oil markets tumble again, which is bad news for OPEC nations, such as Saudi Arabia, that are counting on low prices to stunt the rapid rise of U.S. shale and other competitors. Oil drillers are racing to buy protection for 2016 and 2017 in the form of three-way collars and other options, according to four market sources familiar with the money flows. In some cases, that means guaranteeing a price of no less than $45 a barrel while capping potential revenues at $70. U.S. crude futures traded just below $60 a barrel on […]

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Oil pumps in McKenzie County, in western North Dakota, earlier this year. Photo: Matthew Brown/Associated Press North Dakota is revamping the way it taxes the oil industry amid the recent slump in oil prices, aiming to tone down big fluctuations in tax revenue. The state, the second-largest oil producer after Texas, is already experiencing lower revenue because of falling oil prices. Republican Gov. Jack Dalrymple late Wednesday signed a tax-overhaul bill that was passed in the final days of the legislative session, as concern grew that the state could miss out further on oil-tax collections because of a provision that drops a tax rate to zero for most wells when prices stay below a certain threshold. North Dakota’s tax system was designed more than two decades ago to give oil producers an incentive to keep pumping during price slumps. But the boom of recent years means that changes in […]

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The U.S. oil production decline has begun.  It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled. The implications are profound. Production will decline by several hundred thousand of barrels per day before the effect of reduced rig count is fully seen. Unless oil prices rebound above $75 or $85 per barrel, the rig count won’t matter because there will not be enough money to complete more wells than are being completed today. Tight oil production in the Eagle Ford, Bakken and Permian basin plays declined approximately 111,000 barrels of oil per day in January . These declines are part of a systematic decrease in the number of new producing wells added since oil prices fell below $90 per barrel in October 2014 (Figure 1).  Figure 1. Eagle Ford, Bakken and Permian basin new producing wells by month and WTI oil […]

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Texas state data show oil production on a steady rise, though economic concerns remain in No. 1 oil producer in the nation. File photo by Ian Halperin/UPI AUSTIN, Texas, April 28 (UPI) — Nearly half of all land rigs in service in the United States are in Texas, where a state regulator said oil production increased 5 percent from January. The Railroad Commission of Texas, the state’s energy regulator, said preliminary data from February show crude oil production averaged 2.34 million barrels per day. That’s an increase of 5.2 percent , or 117,550 barrels, from January and 17 percent higher than February 2014. Texas is the No. 1 oil producer in the nation. The so-called Beige Book published by the Dallas Federal Reserve said the low price for crude oil is hurting the state’s oil sector. While most firms surveyed by the bank said they’d be able to weather […]

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North Dakota awards land grants to support development in the west of the state as its government reviews lowering the tax for oil extraction. File photo by Gary C. Caskey/UPI BISMARCK, N.D., April 28 (UPI) — As an oil tax bill heads to his desk, North Dakota Gov. Jack Dalrymple said more than $12 million in grants are supporting development in the oil-rich state. "These grants are an important part of our ongoing commitment to help the oil and gas region meet the challenges created by rapid growth," the governor said in a statement. The state’s Land Board awarded more than 130 grants totaling $12.3 million to fund developments in the west of the state where the boom in oil and natural gas is resulting in unprecedented growth. North Dakota catapulted to the No. 2 spot in the nation, after Texas, as output from the Bakken shale reserve area […]

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North Dakota Oil Tax Reductions North Dakota is one step closer to cutting the price-triggered exemption that will lower the extraction tax on oil. Related: North Dakota Tax Trigger Getting Closer On Friday, North Dakota lawmakers cleared the way to change a 30 year old tax structure that gave some tax breaks for the oil industry have been linked to a price “trigger.”  Debate in North Dakota’s House was fierce and ended in a 66-26 vote in favor of cutting the state’s oil tax rate from 11.5 percent to 10 percent. Republicans believe that this will provide a more stable table policy that will boost the state’s economy, but Democrats have said that it will cost the state billions over the next 10 years. The legislature’s research group estimates that the new tax structure will add $120 million to the state’s coffers between 2015-2017. Now that the bill has […]

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Bakken Oil Workers The Bakken-Three Forks rig count dropped by five to 79 rigs running across our coverage area by midday Friday. In recent Bakken news, the Department of Transportation  issued an emergency order on Friday that establishes a maximum speed of 40 miles an hour for certain trains going through high threat urban areas. Read more: DOT Tells Oil Tankers to Slow Down The U.S. rig count fell again this week by another 22 ending at 932 rigs running by midday Friday.  A total of 225 rigs were targeting natural gas (and increase of eight  from the previous week) and 703 were targeting oil in the U.S. (31 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)   79 rigs are running in the Williston Basin across MT, ND, and SD. 78 are in ND alone. Bakken Oil & Gas […]

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U.S. energy company Hess Corp. argues for a repeal of a 1970s ban on crude oil exports to breath life into a waning shale industry. Photo by Oskari Porkka/Shutterstock NEW YORK, April 27 (UPI) — Keeping U.S. crude oil "trapped" in the domestic market may be undermining the health of the shale industry, the top executive at Hess Corp. said. Arab members of the Organization of Petroleum Exporting Countries stopped exporting oil to the United States in response to U.S. support for Israel in the 1970s. The U.S. Congress responded in kind by passing legislation restricting crude oil exports in part to protect the domestic market from overseas influence. Nearly four decades later, those in the exploration and production side of the U.S. energy sector argue that policy is outdated in an era when domestic shale is leaving storage facilities overflowing with domestic crude oil. "Part of the reason […]

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