This is an older blog post, you will find one on more recent data here
These interactive presentations contain the latest oil & gas production data from all 18,215 horizontal wells in North Dakota that started production from 2001 onward, through May.
Total production
Oil production in North Dakota from horizontal wells came in at 1.1 million b/d, a level at which it has hovered around since 3 years ago. Natural gas production was at 3.1 Bcf/d close to a record high (toggle “Product” to gas to view this). Through May, 383 horizontal wells came online this year, far higher than the 224 horizontal wells that were completed during the first 5 months last year.
Drilling Activity & Supply Projection
After the end of Q1, when 41 rigs were drilling horizontal wells, lower oil prices have started to bite, and as of last week only 34 (horizontal) rigs were still active (according to Baker Hughes).
To understand what this level of activity would mean for future supply, simply based on the status quo in terms of rig count & efficiency and well productivity, we can look at our Supply Projection dashboard:
Horizontal rig count in North Dakota (top chart), and historical & future oil production assuming no changes in rig count & productivity (bottom chart).
As you can see, the drop of 7 rigs from the peak this year so far (top chart) is not sufficient yet to make production drop (bottom chart), as long as rig efficiency (2.2 wells / rig per month) and well productivity stay equal. Oil production would rise to close to 1.2 million b/d by the end of the year, followed by a slow increase over time.
Of course, all these assumptions are unlikely to hold, but users of Novi Insights can set different assumptions in this interactive model for future periods. Changing the future rig count to 27 would roughly keep production flat (assuming no changes in rig efficiency & well productivity).
Well productivity
Unfortunately it does appear that average well productivity may have peaked in North Dakota, as measured by the cumulative oil production during the first 6 months:
Well productivity in North Dakota, as measured by the cumulative oil production during the first 6 months, versus production start. HZ wells since 2009 only.
In the top chart, you can find that well productivity, as measured by the cumulative oil production during the first 6 months, fell in 2022 compared with the 2 years prior. The 735 horizontal wells that came online during last year recovered 107 thousand barrels of oil during the first 6 months, on average, 2-3% below the 2020/2021 well vintages.
In the bottom two charts, you can see how well designs have changed over time. Both average lateral lengths and proppant loadings haven’t changed significantly in North Dakota over the last few years.
Gas flaring
The amount of gas flared in North Dakota has fallen to near the lowest levels in the last decade:
Total natural gas production (red) and total gas flared (orange), in Mcf/d. The map shows flaring activity in May (red is high).
The chart on the right side plots both the total amount of natural gas produced (red) and the total amount of gas flared (orange). Relative to the amount of natural gas produced, only 4.6% (141 MMcf/d) was flared in May this year, compared with 24% 3 years ago.
Terminal decline rates
Given that the Bakken is one of the oldest shale plays, it is also interesting to analyze the decline behaviour of older wells. In many well economics tools, important assumptions are made regarding the eventual decline rate, which can have a major impact on the amount of oil eventually recovered and the financials. In the following overview we can see the average production rate by well vintage (top chart) and the corresponding annual decline rate (bottom chart):
Average production rates by vintage (top) and annualized decline rates (bottom). Horizontal wells since 2008 only. Refracs excluded.
Notice in the bottom chart that initial decline rates are very steep, but gradually improve. However, you can also see that annual decline rates never drop significantly below 10%, even for older wells. The 370 horizontal wells that came online in 2008 that have not been refrac’ed have been declining at around 12% a year in recent years (black curve bottom chart), and their average production rate has fallen to 20 barrels of oil per day (black curve top chart).
Top operators
In the final tab of the interactive presentation at the top (“Top operators”), you can find the top 12 operators in North Dakota, based on recent oil production. Only Continental Resources, Grayson Mill Energy (with its acquisition of Ovintiv early this year) and Kraken Oil & Gas have made increases in total oil production recently. EOG, for some time the largest producer before 2011, does not even make this list anymore as it almost completely halted new development.
Sources
For these presentations, I used data gathered from the following sources:
- DMR of North Dakota. These presentations only show the production from horizontal wells; a small amount (about 40 kbo/d) is produced from conventional vertical wells.
- FracFocus.org
Brief manual
The above presentations have many interactive features:
- You can click through the blocks on the top to see the slides.
- Each slide has filters that can be set, e.g. to select individuals or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
- Tooltips are shown by just hovering the mouse over parts of the presentation.
- You can move the map around, and zoom in/out.
- By clicking on the legend you can highlight selected items.
- Note that filters have to be set for each tab separately.
- The operator who currently owns the well is designated as “operator (current)”. The operator who operated a well in the past month is designated as “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
- If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.
Key Takeaways
- North Dakota horizontal well oil production held near 1.1 million b/d through May, roughly flat for about three years.
- North Dakota horizontal well natural gas production reached 3.1 Bcf/d through May, close to a record high.
- Through May, 383 horizontal wells started production in 2023 versus 224 during the first five months of 2022.
- Baker Hughes data showed North Dakota horizontal rig count fell from 41 at end of Q1 to 34 as of last week.
- At 34 rigs and 2.2 wells per rig per month, the supply projection shows oil production rising toward 1.2 million b/d by year-end.
- Setting future rig count to 27 in the same projection roughly keeps North Dakota oil production flat if efficiency and productivity do not change.
- 2022 well vintages averaged 107 thousand barrels of oil in the first six months, about 2–3% below 2020/2021 vintages.
- Only 4.6% of gas (141 MMcf/d) was flared in May versus 24% three years earlier, near decade-low flaring levels.
