Bakken Reaches Daily Production Record, But Completions Continue To Lag

Well completions in the Bakken continue to lag though not enough to slow oil production, which has hit another record high in North Dakota.

The state’s drilling rig count decreased slightly from July to August, but the number of well completions fell sharply from 251 to 130, said Lynn Helms, director, North Dakota Department of Mineral Resources, on Oct. 15.

Nevertheless, state production, largely in the Bakken, saw a 4% increase in oil production because the number of completions was about 1.5 times the threshold needed to maintain production.

That was enough for a record high as the state inches closer to producing 1 million barrels a day. In August, oil production rose to 28.2 million barrels from July, when operators pumped $27.1 million barrels. That puts August oil production at 911,242 barrels per day, according to preliminary figures.

North Dakota Oil And Gas Statistics

Source: NDIC Department of Mineral Resources * Indicates record high

But completions are still problematic. Helms estimated that at the end of August there were about 450 wells waiting on completion services, meaning the backlog decreased by just 10.

Helms said completion crews kept pace with drilling rigs as the average number of days to drill a well from spud to total depth remained steady at about 22. However, the average number of days from total depth to initial production rose to 105 from 79.

More than 95% of drilling targets the Bakken/Three Forks formations. Crude oil takeaway capacity is expected to be adequate provided rail deliveries to coastal refineries keep up with growth.

Drilling permit activity was up in August and September and should remain high through October as the state helps operators prepare for North Dakota’s notorious winters.

“The goal is to have a sufficient permit inventory to accommodate multi-well pads through the end of load restrictions in 2014 as well as the time required to deal with federal hydraulic fracturing rules if required,” Helms said.

Helms added that uncertainty about federal tax policies and hydraulic fracturing regulations “continues to make investors nervous,” Helms said.

Overall, the number of Williston basin rigs is holding steady. Utilization rates for rigs capable of drilling at 20,000 feet or more remains at about 90%. Shallow well rigs, which drill to 7,000 feet or less, have a 60% utilization rate.

The number of rigs actively drilling on federal land in the Dakota Prairie Grasslands remains zero.

The Fort Berthold Reservation has 23 drilling rigs and produces 299,705 barrels of oil per day.

North Dakota leasing activity is low, consisting mostly of renewals and top leases in the Bakken/Three Forks area.