Carpe Diem

North ‘Saudi’ Dakota sets more new records in December with exponential growth in oil output

ndoilNew monthly oil production data released today by North Dakota’s Department of Mineral Resources show that the Peace Garden State set more new monthly records for oil production in December. For the fifth month in a row, the state produced more than 700,000 barrels of oil per day (bpd), and the 768,853 barrels of daily North Dakota oil in December set a new all-time record (see chart above).  Total North Dakota oil production in October exceeded 20 million barrels for the sixth straight month, and the monthly output of almost 24 million barrels in December established a new monthly production record. Here are some other highlights of North Dakota’s record-setting oil output in December:

1) The state’s oil production increased 43.7% in December above a year earlier, and followed annual increases of 44% in November and 52.8% in October.  It has taken only about 18 months for daily oil production in North Dakota to more than double from 364,160 bpd in May of 2011 to more than 768,000 bpd in December.

2) The Bakken region in western North Dakota produced more than 700,000 bpd in December for the first time ever, setting a new all-time output record of 704,360 bpd, which also represented the Bakken’s highest share ever of the state’s monthly oil production at 91.6%.  In contrast, the Bakken region produced less than 9% of the state’s oil output at the beginning of 2007, before hydraulic fracturing revolutionized domestic oil production in the shale-rich states of North Dakota and Texas.

3) The number of active oil wells in North Dakota increased to 7,993 in December establishing another new state record.  Over the last year through December, more than seven new oil wells were put into production every business day, and each of those new wells is the equivalent of adding a new $8-10 million business to the state’s economy, see recent CD post for more details.

4) The amount of oil produced per active well in North Dakota increased to a new record-high of 2,982 barrels per well, which was almost 12% above the oil output per well a year earlier, and likely reflects the increased efficiency gains from advanced drilling technologies like “pad drilling” that are gaining popularity in North Dakota’s oil industry.

As a result of the state’s oil boom, North Dakota continues to lead the nation with the lowest state unemployment rate at 3.2% in December, and almost five percentage points below the national average of 7.9% for that month. There were fifteen North Dakota counties with jobless rates at or below 3.0% in December, and Williams County, which is at the center of the Bakken oil boom, continues to boast the lowest county jobless rate in the country at just 0.9%.  The exponential growth in North Dakota oil production has fueled exponential growth in the state’s oil and gas jobs, which have more than tripled over the last three years. Overall employment throughout the entire state increased 3.6% in 2012, more than twice the tepid 1.6% pace of job growth nationally last year.

Bottom Line: December was another record-setting month for oil production in North Dakota, and the energy-related boom there continues to make it and Texas the two most economically successful states in America – with record levels of employment and income growth in the Peace Garden State, the lowest state jobless rate in the country, a state budget surplus of $3.8 billion, the lowest home foreclosure rate in the country, strong housing and construction markets, thousands of landowners who have become millionaires from oil royalties, and jobless rates in 15 of the state’s counties at or below 3.0%.  North Dakota’s economic success, job creation, and energy-based prosperity is being driven by the development of the state’s vast energy resources, especially the ocean of shale oil in the state’s Bakken region, which supplied 91% of the state’s oil in December. It’s an economic model that could easily spread energy prosperity elsewhere if more domestic energy resources were opened up to greater exploration and drilling for oil and natural gas.

Q: How long can the Bakken oil boom last? The North Dakota Industrial Commission now estimates that there are 6.5 billion barrels of recoverable oil in the Bakken and Three Forks formations. To date, only 244 million barrels, and 3.8%, of the total recoverable oil have been recovered, so the Bakken Boom could last a very long time.

 

29 thoughts on “North ‘Saudi’ Dakota sets more new records in December with exponential growth in oil output

  1. I’m actually a bit surprised, was expecting production to go down a bit again in December due to weather.

    November was revised up from 733K to 735K bpd.

  2. Bottom Line: December was another record-setting month for oil production in North Dakota, and the energy-related boom there continues to make it and Texas the two most economically successful states in America – with record levels of employment and income growth in the Peace Garden State, the lowest state jobless rate in the country, a state budget surplus of $3.8 billion, the lowest home foreclosure rate in the country, strong housing and construction markets, thousands of landowners who have become millionaires from oil royalties, and jobless rates in 15 of the state’s counties at or below 3.0%. North Dakota’s economic success, job creation, and energy-based prosperity is being driven by the development of the state’s vast energy resources, especially the ocean of shale oil in the state’s Bakken region, which supplied 91% of the state’s oil in December. It’s an economic model that could easily spread energy prosperity elsewhere if more domestic energy resources were opened up to greater exploration and drilling for oil and natural gas.

    It took around $2.5 billion in drilling activity to get that extra 365,000 bpd increase but the $2.5 billion only saw an increase in average well production from 72 to 96 bpd. This means that the high IP that comes form new wells is being eaten away by a massive depletion and the only way you see increases in production is through more and more new investment.

    But most of that investment will go to replace depletion, not increase production. In fact, the data indicates that if stopped drilling now the Bakken will be made up of mostly stripper wells within five years. This means that shale oil is not a solution to American energy problems. In fact, since the shale industry has been a destroyer of capital it looks like a problem.

    Q: How long can the Bakken oil boom last? The North Dakota Industrial Commission now estimates that there are 6.5 billion barrels of recoverable oil in the Bakken and Three Forks formations. To date, only 244 million barrels, and 3.8%, of the total recoverable oil have been recovered, so the Bakken Boom could last a very long time.

    Since the industry can’t self fund projects that go after the low hanging fruit how is it that it will be able to continue as the quality of the reserves goes down?

    • Vangel,,,, not sure if you understand this situation, but I suspect you have no clue.

      2.5 billion to increase production by 365,000 bpd….

      Over 30 million $s in increased daily production from a 2.5 billion investment. Sounds pretty good to me. About 3 or 4 months, and the 2.5 billion is paid back. I think this is a smart investment.

      Only a libtard would see the negative in extremely low unemployment, massive wealth creation, keeping more of the wealth inside the US, increased US manufacturing of equipment etc etc

      • Over 30 million $s in increased daily production from a 2.5 billion investment. Sounds pretty good to me. About 3 or 4 months, and the 2.5 billion is paid back. I think this is a smart investment.

        You are missing the point as usual. The high IP does not give you $30 million a day for very long. The depletion rate is very steep and you are looking at a huge loss of revenue with every day of production. The only way for the producers to make money is to generate more cash from the sale of oil than it takes to lease the land, drill the well, install the hardware and infrastructure, pay for the royalties, etc. And that is not happening. The workers, land owners, and various levels of government are getting rich but the producers are generating negative cash flows and need to keep borrowing to stay afloat as they try to finance their activities.

        Only a libtard would see the negative in extremely low unemployment, massive wealth creation, keeping more of the wealth inside the US, increased US manufacturing of equipment etc etc

        Malinvestments can reduce unemployment, create wealth for a few people, and help certain sectors of the economy. But they are still capital consuming and reduce the wealth of society because there is no free lunch. All those bad loans that can never be paid back will have to be written down and I suspect covered by the taxpayer or a new round of money printing. That is a way to poverty, not wealth.

    • From the NDIC Department of Mineral Resources: Crude oil take away capacity continues to be adequate to keep up with projected production. A majority of North Dakota’s oil is now shipped by rail to east coast, gulf coast, and west coast destinations…

      Governments lied abut the housing problem. They lied about LIBOR. They lie about war casualties and inflation rates. We know that yet are supposed to make pronouncements about the future production using a process that is not economic? Sorry but I would rather depend on the SEC filings to tell me what is going on. They are viewed by investors and have to tell the truth, even if it is hidden among a lot of meaningless words and figures.

      • Governments lied abut the housing problem. They lied about LIBOR. They lie about war casualties and inflation rates“…

        Which war casualties? Which part of the federal government lied about the housing problem?
        Libor is a problem compared to what?

        So what you’re saying vangel is that YOU don’t see a difference between the federal government and the state government?

        Who knows, you may be right?

          • Yes it is. But if you looked at the evidence the government was quite aware of what was going on and approved. There is a desire to maintain a certain narrative that all is well and that the crisis is over. The government does not want people to figure out that all it can do is have the central banks keep printing until the currencies are no longer worth much more than toilet paper and there is no way for the bond bubble that you keep ignoring to be kept intact.

          • LIBOR is based on private banks reporting interest rates, not the government“…

            Thanks, that was my impression also…

        • Which war casualties?

          The number of innocent people that they killed with drones is a start. Many major pronouncements of some terrorists being hit by drones are followed by quiet admissions that most of the people killed were innocent bystanders. Those drones are as good a recruiting tool for the terrorist as anything but nobody in the government is willing to have an honest discussion about the unintended consequences or their overall effectiveness.

          Which part of the federal government lied about the housing problem?

          The regulators who were looking after the GSEs and the banking industry certainly lied when they claimed that the industry was sound and the collateralized debt obligations (CDOs) being sold were sound.

          Libor is a problem compared to what?

          It is a problem. The NY Fed knew all about the issue a long time before the fraud was finally uncovered but did nothing about it because of the Bear/Lehman collapse. Given the fact that LIBOR was a reference for all kinds of rates it is a huge problem.

          So what you’re saying vangel is that YOU don’t see a difference between the federal government and the state government?

          What I see are incentives. The state government has every incentive to keep the money flowing in for as long as possible. As such it is not a surprise that it will cherry pick the data and assume the best case scenario most of the time. And given those incentives we see why the academics and analysts hired are chosen for their optimism, just as the tech and housing related academics and analysts were chosen.

          Given those incentives I see no reason to expect any more accuracy from the government employees working for the state than the government employees working for the federal government. Which is why I like to look at the data for myself.

          • The number of innocent people that they killed with drones is a start“…

            LOL! Who says these ‘alledged‘ victims were ‘innocent‘ what their claim to credibility?

            The regulators who were looking after the GSEs and the banking industry certainly lied when they claimed that the industry was sound and the collateralized debt obligations (CDOs) being sold were sound“…

            Well your style hasn’t changed, another factless statement that clashes with reality

            As such it is not a surprise that it will cherry pick the data and assume the best case scenario most of the time“…

            ROFLMAO!

            Self description on your part to a T…

            Thanks vangel

          • LOL! Who says these ‘alledged‘ victims were ‘innocent‘ what their claim to credibility?

            Actually, your own government did. It has paid off victims’s families with cash while it has been silent at home.

            Well your style hasn’t changed, another factless statement that clashes with reality…

            Yes, the idiot Democrats in Congress had a lot to do with the housing crisis. But Bush went along as did the GOP because it bought votes. When Bush had control of Congress he never did anything to stop the bubble from expanding. And all along the way the NY Fed knew about the LIBOR fixing scam. But Geithner refused to do anything about the LIBOR problem because he was too busy trying to pretend that the financial crisis was over.

          • Actually, your own government did. It has paid off victims’s families with cash while it has been silent at home“….

            Oh that’s funny vangel, you give a link to a libtard tabloid as proof positive that the US government is supposedly killing ‘innocents‘ in a war zone…

            There are NO innocents in a war zone unless you’re a liberal of course…

            But Bush went along as did the GOP because it bought votes“…

            Liar and you’ve been schooled on this before…

          • Oh that’s funny vangel, you give a link to a libtard tabloid as proof positive that the US government is supposedly killing ‘innocents‘ in a war zone…

            Not supposedly. They actually killed children and women and children. It was reported in the WSJ, which is where I read it initially but was also covered by ABC, CBS, NBC, and CNN. I guess that Rush must have forgotten to mention it so you never heard about it.

            The study by Stanford Law School and New York University’s School of Law calls for a re-evaluation of the practice, saying the number of “high-level” targets killed as a percentage of total casualties is extremely low — about 2%.

          • They actually killed children and women and children. It was reported in the WSJ, which is where I read it initially but was also covered by ABC, CBS, NBC, and CNN“…

            You still don’t get it do you vangel?

            Regardless of what the news media is ranting on about there are NO innocents in a war zone…

            BTW its easy for the news media to make all sorts of indignant claims about killing the innocents, they’re not at the sharp end…

          • You still don’t get it do you vangel?

            Regardless of what the news media is ranting on about there are NO innocents in a war zone…

            Really? You mean to say that the Polish Jews who wound up in the concentration camps were not innocent? Or that those kids who died in their beds because some idiot analyst got mixed up was not innocent? When you invade a country and declare it a war zone you can’t hide behind the ‘there are no innocents’ lie. The Germans tried it at Nuremberg and the strategy did not work.

            And keep in mind that your pathetic lie works against the US. Since bin Laden declared war on the US al Qaeda could claim that the people in the WTC towers could not be considered innocent and were a legitimate target. Some of us would not accept such an argument.

          • BTW its easy for the news media to make all sorts of indignant claims about killing the innocents, they’re not at the sharp end…

            BTW it is easy for thoughtless chicken-hawks who could not see the lies that were justified to begin a needless war make all kinds of claims about how killing children and women is not really a bad thing. Or to ignore the toll it is taking on the soldiers who are asked to kill people that they might consider innocent.

          • BTW it is easy for thoughtless chicken-hawk blah, blah, blah“…

            This is hilarious coming from a gutless, clueless libtard who grip on reality is tenuous at best…

          • BTW it is easy for thoughtless chicken-hawk blah, blah, blah“…

            This is hilarious coming from a gutless, clueless, libtard who grip on reality is tenuous at best…

          • This is hilarious coming from a gutless, clueless, libtard who grip on reality is tenuous at best…

            I note that you cannot refute a single claim but have to resort to name calling and outright profession of ignorance. As I said, the killing of innocents is well documented. Just a few hours ago one of the Senate’s biggest neocon supporters, Lindsay Graham, admitted that 4,700 people have been killed. (Although he does not seem to be counting Iraq and Afghanistan.) He even said, “Sometimes you hit innocent people, and I hate that, but we’re at war, and we’ve taken out some very senior members of al Qaeda.”

            Now you can pretend that everyone is missing the true picture and that Bush lied when he said that he was wrong about Iraq’s WMDs or that Graham is wrong about the drones. But nobody with a brain will be as gullible or as stupid as you seem to be.

          • I note that you cannot refute a single claim but have to resort to name calling and outright profession of ignorance“…

            You’re can be a clueless clown on occassion…

            I’ve refuted your BS on several occassions as have others…

            Yet you think that repeating some of your factless and sometimes bizzare statements over and over again that through some sort of magic that they’ll will be taken seriously…

            Get a grip…

            Who do you think you’re kidding?

          • You’re can be a clueless clown on occassion…

            I’ve refuted your BS on several occassions as have others…

            No you have not. When the principal players admitted that you guys are wrong there is no amount of spin from Fox or neoconservative analysts that can change the facts. There were no WMDs in Iraq. Iraq had nothing to do with the 9/11 attacks. The drones are killing many innocents and are a recruitment tool for the terrorists. When Lindsay Graham finally admits that the CIA drone program is killing innocent people you have nothing much to stand on.

            And my points about the spending are valid. Over the past few months we have seen many analysts finally figure out that when you look at all of the hidden spending that is found in budgets outside of Defence you are looking at around $1 trillion in war related expenditures even if we do not count the interest paid on the previously accumulated war debt. That means that military related spending is consuming almost all of the revenue that is paid out as income tax.

            The facts are what they are, not what your neoconservative puppet masters say they are. You need to stop looking at the shadows they are casting on the walls of your cave and step into the light. The view is much better out there.

          • Liar and quite windy while being one…

            You were given film in which the people you support have admitted the errors that you deny. I guess that you are the right’s version of Larry.

          • You were given film in which the people you support have admitted the errors that you deny“…

            Geez! You’re delusional best…

            It was total nonsense…

          • Geez! You’re delusional best…

            It was total nonsense…

            I think that it is clear that you are deluded. When all of those people who supported the Iraq war admitted that they were lied to and Bush himself admitted that Saddam had nothing to do with 9/11 you have nothing on which to build your delusions. When Lindsay Graham admits that innocents are killed by drone attacks you have little left to hide behind. As I wrote above, you are the right’s version of Larry.

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