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North Dakota publishes monthly ND Historical Barrels of Oil Produced by County. This data however does not include confidential wells. But they do estimate, by county, their confidential well production here: Oil and Gas Production Report

All charts are in barrels per day and are only for the last 16 months in order to get a better and expanded view of what each county is doing.

First a sixteen month view of all North Dakota production. North Dakota production, in April, stood at 1,168,636 bpd. That is 17,631 bpd below their production last September, seven months previous. North Dakota production is down 59,385 bpd since the high reached in December.

McKenzie County April production stood at 413,671 bpd, 31,555 bpd below their high in December.

Mountrail County production stood at 255,384 bpd in April, 36,132 bpd below their peak in September.

…click on the above link to read the rest of the article…

EPA’s New Fracking Study: A Close Look at the Numbers Buried in the Fine Print

June 26, 2015

EPA’s New Fracking Study: A Close Look at the Numbers Buried in the Fine Print

When EPA’s long-awaited draft assessment on fracking and drinking water supplies was released, the oil and gas industry triumphantly focused on a headline-making sentence: “We did not find evidence of widespread, systemic impacts on drinking water resources in the United States.”

But for fracking’s backers, a sense of victory may prove to be fleeting.

EPA’s draft assessment made one thing clear: fracking has repeatedly contaminated drinking water supplies (a fact that the industry has long aggressively denied).

Indeed, the federal government’s recognition that fracking can contaminate drinking water supplies may prove to have opened the floodgates, especially since EPA called attention to major gaps in the official record, due in part to gag orders for landowners who settle contamination claims and in part because there simply hasn’t been enough testing to know how widespread problems have become.

And although it’s been less than a month since EPA’s draft assessment was released, the evidence on fracking’s impacts has continued to roll in.

A study in Texas’ Barnett shale found high levels of pollutants – volatile organic compounds, heavy metals, and known carcinogens – in many people’s drinking water, based on testing from over 500 water wells. The contaminants found were associated with the shale drilling industry, but the researchers cautioned it was too soon to say whether the industry actually caused the contamination.

But the association was strong, the researchers said. “In the counties where there is more unconventional oil and gas development, the chemicals are worse,” lead researcher Zachariah Hildenbrand told Inside Climate News. “They’re in water in higher concentrations and more prevalent among the wells. As you get away from the drilling, water quality gets better. There’s no doubt about it.”

…click on the above link to read the rest of the article…

Another 4.4 Magnitude Industry Reported Quake in Alberta

June 17, 2015

Another 4.4 Magnitude Industry Reported Quake in Alberta

Chevron shuts down operations following seismic event near Fox Creek.

Chevron Canada has confirmed that “a magnitude 4.4 seismic event was recorded by seismic monitoring arrays operated by Chevron Canada and Natural Resources Canada” in the Duvernay shale near Fox Creek, Alberta on Saturday.

It’s the second record-breaking industry-reported tremor to hit the region in a year. In January, industry triggered a 4.4 magnitude earthquake in the Duvernay shale.

That event forced the Alberta Energy Regulator to adopt a “traffic light system” to regulate seismic events in the region. The system requires companies to report events greater than a magnitude of 2.0, and to shut down operations once a 4.0 magnitude event is observed nearby.

As a result of the new regulations, Chevron reported the earthquake to the regulator and shut down operations at a natural gas well pad located approximately 27 kilometres south of Fox Creek.

However, the regulator has given the company permission to finish securing the well before it temporarily suspends operations at the site.

A spokesman for Chevron Canada, Lief Sollid, said the company “was installing production tubing in a well on the pad at the time of the event. Multi-stage hydraulic fracturing operations were completed on the eight-well pad on June 5.”

Hydraulic fracturing, the cracking of rock with highly pressurized fluids, can trigger an earthquake days after the event.

Sollid added in an email that “no injuries, property damage or environmental impacts have been reported as a result of the event.”

Since 2013, when companies started to fracture the deep shale with one to two-kilometre-long horizontal wells, the region has experienced a wave of tremors.

The Duvernay shale, or what stock promoters have dubbed the “new millennium gold,” covers a 56,000 square mile region and contains natural gas liquids. An average horizontal well may cost $15 million to drill.

Chevron is part-owner of the Kitimat LNG project, which will operate as an export facility for unconventional natural gas that has been fracked and extracted from British Columbia’s Liard and Horn River basins.

…click on the above link to read the rest of the article…

The Dark Side Of The Shale Bust

June 16, 2015

The Dark Side Of The Shale Bust

The fallout of the collapse in oil prices has a lot of side effects apart from the decline of rig counts and oil flows.

Oil production in North Dakota has exploded over the last five years, from negligible levels before 2010 to well over a million barrels per day, making North Dakota the second largest oil producing state in the country.

But the bust is leaving towns like Williston, North Dakota stretched extremely thin as it tries to deal with the aftermath. Williston is coping with $300 million in debt after having leveraged itself to buildup infrastructure to deal with the swelling of people and equipment heading for the oil patch. Roads, schools, housing, water-treatment plants and more all cost the city a lot of money, expected to be paid off with revenues from oil production that are suddenly not flowing into local and state coffers the way they once were.

Williams County Commissioner Dan Kalil says that a lot of unemployed people who flocked to North Dakota are left in the wake of the bust, something that the local government has to sort out. “We attracted everyone who had failed in Sacramento, everyone who failed in Phoenix, everyone who failed in Las Vegas, everybody who had failed in Houston, everyone who failed in Florida,” Kalil said in a June 3 interview with WHQR.org. “And they all came here with unrealistic expectations. And it’s really frustrating for those of us left to clean up the mess.”

Output is still only slightly off its all-time high of 1.2 million barrels per day, which it hit in December 2014. But more declines are expected with drillers pulling their rigs and crews from the field. Rig counts in North Dakota have fallen to just 76, as of June 12, far below the 130 or so that state officials believe is needed to keep production flat.

…click on the above link to read the rest of the article…

Don’t Believe The Hype On U.S. Shale Growth

June 15, 2015

Don’t Believe The Hype On U.S. Shale Growth

The OPEC Free Fall

There is a popular narrative going around that I want to address in today’s article. Last November, after several months of plummeting crude oil prices, the Organization of the Petroleum Exporting Countries (OPEC) met to discuss the oil production quotas for each country in the months ahead. Many expected OPEC to cut production in order to shore up crude prices that had been falling since summer. This was the strategy favored by OPEC’s poorer members, as many require oil prices at $100/barrel (bbl) in order to balance government budgets.

Instead, OPEC announced that they would continue pumping at the same rate. They chose to defend market share against the surge of supply from U.S. shale producers, and in doing so the fall in the price of crude oil accelerated. A look at the U.S. rig count shows the swift impact to U.S. shale drillers in the aftermath of that meeting:

Rig counts went into free-fall after it became clear that OPEC was not interested in propping up the price of oil for the benefit of rapidly expanding shale oil producers. While that approach hurt OPEC’s income in the short term, it also immediately impacted rig counts in the shale oil fields. But — and here is the narrative — shale oil producers continue to make gains in production even as rig counts have been slashed because they are becoming more and more efficient

Dissecting the Narrative

There is some truth to the narrative. Yes, oil production has continued to grow even though rig counts have plummeted. The week before OPEC’s meeting last November, the number of rigs drilling for oil stood at 1,574. Oil production that week was 9.1 million bpd. Today, with the rig count at 642, production is 9.6 million bpd — a gain of just over half a million bpd.

…click on the above link to read the rest of the article…

Busting The “Canadian Bakken” Myth

June 9, 2015

Busting The “Canadian Bakken” Myth

The financial pages of Canadian newspapers have been full of headlines lately announcing the potential of two large shale oil fields in the Northwest Territories said to contain enough oil to rival the Bakken Formation of North Dakota and Montana.

The report by Canada’s National Energy Board (NEB) evaluated, for the first time, the volume of oil in place for the Canol and Bluefish shale formations, located in the territory’s Mackenzie Plain. It found the “thick and geographically extensive” Canol formation is expected to contain 145 billion barrels of oil, while the “much thinner” Bluefish shale contains 46 billion barrels.

The report did not estimate the amount of recoverable oil, but points out that even if one percent of the Canol resource could be recovered, that represents 1.45 billion barrels. The calculation immediately had reporters comparing Canol and Bluefish to the Bakken, where the latest USGS estimate shows 7.4 billion barrels of technically recoverable oil (this includes the Three Forks Formation underlying the Williston Basin straddling North Dakota, Montana, Saskatchewan and Manitoba).

“Northwest Territories sitting on massive shale oil reserves on par with booming Bakken field in U.S.,” enthused the Financial Post. “NEB and GNWT study finds 200 billion barrels of oil in the Sahtu,” gushed CBC News, referring to a region of the sprawling territory that cuts across three provinces and touches the Arctic Ocean.

…click on the above link to read the rest of the article…

The EIA’s Drilling Productivity Report

June 9, 2015

The EIA’s Drilling Productivity Report

The EIA has released its latest Drilling Productivity Report. There were some interesting data presented in the report.

They say the Bakken peaked at 1,311,703 barrels per day in March and will have declined by 74,763 bpd in July.

The EIA says the Bakken will get 51,000 barrels per day in July from new wells but legacy wells will decline by 80,000 barrels per day leaving a decline of 29,000 bpd.

The EIA says Eagle Ford peaked in 1,711,376 barrels per day in March and will have declined by a total of 117,971 bpd in July.

The EIA says Eagle Ford will get 90,000 bpd from new wells in July but the decline from legacy wells will be 139,000 bpd leaving a decline of 49,000 bpd.

The EIA says Niobrara peaked in March at 459,861 bpd and will have declined by 49,712 bpd by July.

…click on the above link to read the rest of the article…

The Bakken ”Red Queen” is restrained with more credit

June 9, 2015

The Bakken ”Red Queen” is restrained with more credit

This post is an update on Light Tight Oil (LTO) extraction in Bakken based upon published data from the North Dakota Industrial Commission (NDIC) as per March 2015.

Extraction developments of LTO from Bakken may be followed by county, formation, vintage of wells, and one important source to understand the developments are coming from studying the developments by companies. Holding this up with companies’ financial statements (10-K and 10-Q) is an invaluable source about the companies, their financial capabilities and their strategies. This information is paramount to understand the developments in LTO extraction from Bakken and provides valuable insights into what to expect of future developments.

To get some understanding of what will drive future developments, it is helpful to look at individual companies.

Amongst all the companies operating in Bakken I selected for this post to present a closer look at 3 of the biggest companies in Bakken; Continental Resources, EOG Resources and Whiting Petroleum.

These 3 companies were found to be representative for several of the companies with regard to a range of variation in quality of wells, development strategies, use of debt, asset sales and not least what their responses to oil price changes may reveal.

For Q1 – 15 the companies involved in LTO extraction in Bakken used an estimated $4 Billion(CAPEX) for well manufacturing and an estimated $2.3 Billion was from external sources, primarily from equity and asset sales and assuming more debt.
The “average” well with around 90 kb [90,000 barrels] of flow in its first year is estimated to have an undiscounted point forward break even (that is a nominal break even with 0% return for the well)at around $60/Bbl (WTI).
The break even price increases with increases in the return requirement.
This analysis shows that the companies have deployed different strategies as responses to the decline in the oil price, which will affect future developments in LTO extraction.

…click on the above link to read the rest of the article…

World Oil Output Last 3 Years

June 4, 2015

World Oil Output Last 3 Years

The EIA publishes every possible energy stat for the USA and hardly anything for the rest of the world. Well, anything current for the rest of the world anyway. TheirInternational Energy Statistics is already five full months behind and working on six. December 2014 is the last international oil production data we have.

Anyway during this lull in other data I decided to look at the last three years of international data, from December 2011 to December 2014. All data is in thousand barrels per day.

World C+C production was flat for most of 2012 and 2013 but in late 2013 production took off and has increased by about 3 million barrels per day above the average for 2012 and 2013. December C+C production was 79,300,000 BPD.

While total C+C production has increased by 3,000,000 BPD over the last three years the top ten gainers have increased just over twice as much, 6,200,000 BPD.

And just who were the big C+C production increasers for the last three years. Keep in mind this is the total change, or increase, over the last three years, not total production.

The largest gainer, by a wide margin, was the USA. Iraq and Canada were runners up and the rest were also rans.

Almost everyone else had declines.

…click on the above link to read the rest of the article…

OPEC oil glut is shattering Harper’s superpower dream

June 4, 2015

OPEC oil glut is shattering Harper’s superpower dream

Producers’ brinksmanship has worked, and Canada is cutting production

In the battle to see who blinks first, OPEC hasn’t blinked. And it looks like it isn’t going to, as it meets this week in Vienna.

Six months ago the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, announced it would keep pumping crude even though the world was swimming in the stuff.

While some analysts are predicting a surprise at this week’s meeting, most reports now say OPEC is not considering reining in production.

And whether or not OPEC continues to pump, there are new signs that Prime Minister Stephen Harper’s dream for Canada as an “emerging energy superpower” may be in trouble.

A report this week from Barclays showed Canadian production tumbling. The global giants with a stake in Canada’s oil sands have stopped expansion plans and many have walked away.

Meanwhile, Alberta oil producers have threatened to put new developments on hold until they see whether Rachel Notley’s new NDP government gives them what they want.

Missing a crucial window

To add insult to injury, low prices have emboldened the “dirty oil” lobby. There are new reports this week that the New York oil hub is rejecting petroleum from Canada’s “tarsands.”

Alberta’s oilsands may still contain some of the world’s largest petroleum reserves, up there with Venezuela and Saudi Arabia, but there is an increasing danger that Canada has missed a crucial window to develop and extract those resources.

…click on the above link to read the rest of the article…

Meet The Man Responsible For Oklahoma’s Earthquake Epidemic

May 26, 2015

Meet The Man Responsible For Oklahoma’s Earthquake Epidemic

As part of the US shale miracle, a far less pleasant, and talked about side-effect are the millions of gallons of wastewater: that key component of the new drilling technology that allows previously inaccessible deposits to be extracted. And, as increasingly more states are finding out, the problem isn’t pumping the water out, but finding a place to put it, no places more so than Oklahoma.

To be sure, Oklahoma benefited hugely from the shale revolution: the state’s oil production has doubled in the past five years. And now, as the Piper has finally come to collect his due, the ground is literally shaking under the feet of Oklahoma’s residents as the aftermath of the fracking “boom” has unleashed an unprecedented series of earthquakes.

The reason: instead of disposing wastewater in some regulated manner, in Oklahoma it gets injected back underground. And as wastewater disposal rates have doubled, seismic activity has exploded across Oklahoma. After averaging 1.6 earthquakes per year of magnitude 3.0 or higher, the state experienced 64 in 2011, including its largest in recorded history—a 5.7-magnitude temblor on Nov. 6, 2011, centered in Prague, 50 miles east of Oklahoma City, that buckled a highway, destroyed 14 homes, and injured two people.

Last year, Bloomberg reports, the number soared to 585 quakes, making Oklahoma the most seismically active state in the continental U.S.; it’s on pace for 900 quakes in 2015 a number one would expect from a place such as Japan, located on a continental fault line or even California (whose San Andreas faultline is about to make another B-grade movie appearance) and certainly not in America’s heartland. Swarms of quakes have rattled other states with oil and gas operations, including Arkansas, Colorado, Kansas, New Mexico, Ohio, and Texas.

…click on the above link to read the rest of the article…

OPEC Struggling To Keep Up The Pace In Oil Price War

May 21, 2015

OPEC Struggling To Keep Up The Pace In Oil Price War

Some market watchers, such as Cornerstone Analytics (CA), have consistently stated that the underestimation of demand, coupled with over-estimation of supply, will mask the growing call on OPEC oil in the second half of this year. CA recently noted that global demand outstripped supply by some 4 million barrels in April . This comes in addition to the mounting evidence that the oil market, via rig count declines, slowing production growth, higher demand and huge API crude inventory declines, is starting to readjust.

Be that as it may, Goldman Sachs (GS) seems to believe oil must fall to $45 by October (like it previously thought $30 oil was a certainty) to clear the market and rebalance, despite signs that a readjustment is already underway. When was the last time fundaments got ignored and prices went in opposite direction? As an aside, take a look at the S&P 500 vs. GDP growth, as one makes new highs while the other falls from 3.0 percent growth to under 1 percent so far this year!

In other words, asset prices continue to be set by central bankers, and not free markets, so the GS call does make sense if you believe fundamentals don’t matter at all. Still, they should be discussed either way. Rather than being based on the fundamentals, GS, like others, have consistently been off the mark when it comes to oil prices, but refuse to acknowledge it (the agenda at GS has been exposed via Zerohedge). Multiple calls just this week for $45, on top of other economic research, clearly reveal this.

…click on the above link to read the rest of the article…

Oil Prices Will Fall: A Lesson In Gravity

May 19, 2015

Oil Prices Will Fall: A Lesson In Gravity

The oil price collapse is not over yet. It is more likely that the Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel.

That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term.

Our present situation is like that of the cartoon character Wile E. Coyote. He routinely ran off of a cliff and as long as he didn’t look down, everything was fine. But as soon as he looked down and saw that there was no ground beneath him, he fell. Hope and momentum cannot overcome gravity.

Figure 1. Wile E. Coyote cartoons. Sources: The Braiser, Dubsisms and Forbes.

Neither can ignoring the data.

When I look down from $60 WTI and almost $68 Brent, I see no support except sentiment. Like Wile E. Coyote, we need a gravity lesson about oil prices. What goes up for no reason, will come down sooner than later and it may fall hard.

Let’s examine the facts.

The principal reason for the oil-price collapse is a production surplus–more supply than demand for oil. The latest data from EIA (Figure 2) indicates that the surplus is the greatest since the current oil-price collapse began. In other words, the cause of the price collapse is getting worse, not better!

Figure 2. World liquids production surplus or deficit (production minus consumption), January 2011-April 2015. Source: EIA and Labyrinth Consulting Services, Inc.

…click on the above link to read the rest of the article…

Environmentalists Are Taking California To Court Over Illegal Oil Industry Wastewater Injection

May 18, 2015

Environmentalists Are Taking California To Court Over Illegal Oil Industry Wastewater Injection

Environmentalists filed a motion requesting a preliminary injunction today in a California court to immediately stop the daily illegal injection of millions of gallons of oil field wastewater into protected groundwater aquifers in the state.

Last week, Earthjustice filed a lawsuit on behalf of the Sierra Club and the Center for Biological Diversity in Alameda County Superior Court that challenges California regulators’ emergency rules meant to rein in the state’s disastrous Underground Injection Control (UIC) program.

Officials with the state’s Division of Oil, Gas, and Geothermal Resources (DOGGR) have admitted that their agencyimproperly permitted more than 2,500 wells to pump oil industry wastewater and fluids from enhanced oil recovery techniques like acidization and steam flooding into groundwater aquifers that should be protected under the federal Safe Drinking Water Act.

Instead of shutting down the offending wells, however, DOGGR issued emergency rules last February that would allow many of them to continue operating until 2017, according to the complaint filed by Earthjustice, which seeks to have the new rules thrown out and the wells operating in protected aquifers shut down while new regulations are being developed.

“Both the emergency regulations and the status quo fail to protect California’s underground drinking water sources from harm,” the complaint states. “Since DOGGR continues to fail in implementing its regulatory duties, this Court must vacate the emergency regulations and ensure that DOGGR complies with the law by ordering DOGGR to take all immediate action necessary and available to it to meet its obligations to prohibit illegal injection of wastewater into protected aquifers.”

…click on the above link to read the rest of the article…

This May Just Be The Start Of The Oil Price War Says IEA

May 17, 2015

This May Just Be The Start Of The Oil Price War Says IEA

Saudi Oil Minister Ali al-Naimi may be one of the most powerful individuals in the global oil industry. After all, as the top oil official in arguably the world’s most influential oil-producing country, he has enormous influence.

But for all his power, is he the most ingenious? That question arises from the release of two reports on the current state of the oil industry that look at whether or not OPEC’s strategy of forcing US shale to cut back is succeeding.

The first, issued on May 12 by OPEC, says, in essence, that Saudi Arabia’s effort to keep its own oil production at near-record highs is succeeding in wresting market share back from US producers of shale oil, also called “light, tight oil” (LTO). The second, issued a day later by the International Energy Agency (IEA), agrees, but only up to a point.

“In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked,” the IEA reported. “Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating.”

But the report from the Paris-based IEA, which advises 29 industrialized countries on energy policy, also pointed to a rebound in oil prices that could benefit US shale producers.

As both the OPEC and IEA reports point out, the decline in US shale oil output has somewhat reduced the oil glut and led oil prices to rally up to about $65 per barrel. And the IEA adds that this brings LTO back above the threshold where its production becomes profitable again.

…click on the above link to read the rest of the article…

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