Booming Bakken Oil Production
North Dakota Production Sets Record
By now, you likely know all about the Bakken boom; production levels are going through the roof – but you don’t need me to tell you that.
But as oil production records are constantly being set and broken, some of what’s going on might surprise you.
While the North Dakota portion of the nation’s largest unconventional oil field posted a 1.4 percent increase in production in June, rising by 54,000 barrels per day (bpd) to 756,980 bpd and setting a new record, the numbers aren’t what analysts had been expecting.
And it can be misleading. Even though daily oil production increased, there was still a reduction in the state's overall production in June. According to BismarckTribune.com, monthly production totals for June were at 24.6 million barrels, a decrease from 25.1 million in May.
The previous record for monthly increased production was in February of this year, when an additional 41,000 bpd was produced compared to January.
If this is the largest increase in production in the field’s history, you wouldn’t expect to see overall production go down.
The Bakken has been the fuel that has lifted the U.S. to its unprecedented oil production levels, not seen since 1989, and to think that it was only producing 70,000 bpd in 2008, it’s had quite a journey to the top of the oil chain.
The U.S. now reaches almost 90 percent of its energy needs, something we haven’t done since Reagan was in office.
But Bakken production has slowed this year. We had a severe winter, which made it harder to transport water, chemicals, and sand to drilling sites for fracking. So while Bakken output is always on the rise, production increased by only 52,820 bpd over the first six months of the year, according to Bloomberg, compared to 128,030 from the year prior.
Part of June’s record surge has a lot to do with more favorable weather that allowed new wells to see completion. But even then, the 54,000 bpd wasn’t as much of an increase as regulators predicted.
Load restrictions were still in place on many North Dakota roadways due to a very rainy spring, and this stalled a lot of operations.
And wells were another factor – those being drilled and those being completed through fracking were nearly identical. Completed wells were expected to outpace drilling wells.
For the summer months of July and August the load restrictions should be lifted, and an even more significant surge in production is expected as the Bakken once again begins firing on all cylinders.
North Dakota Production
The state of North Dakota as a whole was below expected production numbers. Total statewide production for June was 821,200 bpd, though analysts expected it to be closer to 830,000.
That, too, is most likely due to the load restrictions placed on state roadways, and it should meet forecasts in the coming months.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
For the first time ever, North Dakota passed 9,000 producing wells throughout the state in June, putting the active well count at 9,071, according to BismarckTribune.com, up from 8,932 wells in May.
Shale fields are expected to continue to grow in the Roughrider State and should reach production levels of 1.1 million bpd by the start of 2015.
The next two to three months should put the state back on that pace.
The Three Forks formation is looking like it will become a huge factor in the North Dakota oil game. Located right below the upper part of the Bakken, some are saying that it could prove just as profitable as the Bakken. Others, however, speculate that it is just an extension of the Bakken.
Until recently, the lower zones of the Three Forks were a mystery, but recent studies have found that both oil and gas will be a part of its reserves.
Companies like Brigham Exploration (NASDAQ: BEXP) are looking to move on the Three Forks.
July production figures are reported in mid-September. That’s when we’ll most likely see numbers hitting their mark and the Bakken cooking more than ever. And with the Three Forks coming alive, things could really start to get loose.
If you liked this article, you may also enjoy:
Energy Demand will Increase 58% Over the Next 25 Years
After getting your report, you’ll begin receiving the Energy and Capital e-Letter, delivered to your inbox daily.