The IP30 numbers for 2015 have been updated and are now available for the full year 2015 here.
The part of the original article from January 2016 regarding production starts hasn’t been updated and is shown below. It should be noted that there is a difference between the dates of completions, production starts and IP30 months. They might not fall in the same quarters.
The 3 columns on the left side of the following table show the numbers of wells starting production for each month from January 2014 to July 2015. The data have been retrieved from the monthly NDIC production reports. They include all wells -horizontal wells and others. It shows that the monthly number of new wells in the first half of 2015 barely declined from the 2014 level. Compared to the first half of 2014, the decline was just 7%. That was the simple reason why production in the first half of 2015 remained at year end 2014 level.
What’s worth mentioning is that it took more than 900 new wells in the first half of 2015 (1840 wells annualized = 87% of the total new 2014 wells) just to maintain production at the level reached at the end of 2014. In 2014, 2100 new wells were able to increase monthly production by 32% y/y. That supports the conclusion of studies published in 2014 (EIA, D. Hughes), predicting that at the 2000 new wells/year level, Bakken’s production was going to peak in 2016. Increasing the number of new wells above 2000/year would mean even lower marginal production and higher average break even costs and can only be justified with Oil prices above $100/b.
|Month||ND Bakken – Production Starts
(Number of wells)
|Completions in NDIC’s Horiz. Wells Tables|
|Confidential Wells||Non confidential wells||Sum||Confidential Wells||Non confidential Wells||Sum|
What’s also worth mentioning is that the ratio of confidential to non confidential wells has fallen from 1:1 in the first half of 2014 to 1:2 in the first half of 2015.
The middle column shows the completion numbers reported in NDIC’s monthly Director’s Cut reports. The monthly changes in production starts were less volatile than the monthly changes in Director’s Cut’s completion data. But what’s more remarkable is that the sum of wells having started production in the observed period was increasingly higher than the numbers reported in the Director’s Cut reports – from 5% in the first half of 2014 to 28% in the first half of 2015.
To clarify that issue, the data contained in NDIC’s regularly updated lists labelled “Horizontal wells by production zone” were analysed. These lists contain well specific information including completion dates. The aggregated results are presented in the 3 columns on the right side (the segregation in confidential/non confidential was obtained by linking the well data of these lists with the monthly production database). Some twenty of the 2015 wells contained in the lists did not have completion dates. The total amounts to approx. 910 completions in the first half of 2015 vs 920 wells having started production in that period. Taking into account timing differences between the completion month and the first production month, the small difference in the aggregated numbers can be considered as a validating match. It becomes clear that the completion data in the Director’s Cut reports did not match reality.