Friday, June 26, 2009

N Dakota Production Ramping Up

It's no Prudhoe Bay in her prime (nor even now), but N Dakota's production of Bakken is ramping up nicely, making it the fifth-most productive state:

Development of the promising Bakken Shale formation is reshuffling the deck for US states with bragging rights on oil production, boosting North Dakota now into the top tier of oilpatch jurisdictions.

Thanks to the Bakken, North Dakota has drilled past New Mexico, Wyoming and the venerable Oklahoma to claim fifth place among US oil producing states with average daily output of 202,000 b/d, according to EIA data at the end of last year, before activity slowed for the latest recession.

Excluding offshore output, Louisiana may well be in reach with its production of 209,000 b/d. But the Bakken will have to prove extremely prolific for North Dakota to challenge California's 587,000 b/d, Alaska's 702,000 b/d or Texas' 1.09 million b/d any time soon.

Given the optimism of some USGS reports about the potential for the Bakken, however, we may be watching the emergence of a new state oil-producing powerhouse. Last year the USGS estimated the Bakken formation may hold anywhere from 3 billion to 4.3 billion barrels of recoverable oil.

North Dakota's 202,000 b/d average for December of 2008 represented a 50% gain from December of 2007, when North Dakota's 135,000 b/d average still had it lagging Wyoming's 145,000, New Mexico's 161,000 and Oklahoma's 164,000.

Here's the Oil Drum laying an egg on Bakken last year:

If total production amounts to only 500 million barrels, as I have suggested, this would equate to about 23 days worth of United States oil usage, spread over many, many years.

Looking at future production another way, the recent peak in production has been 75,000 barrels of oil per day (discussed in more detail below). Even if operators are able to triple this amount, the resulting production of 225,000 barrels a day (which would be a considerable challenge), will amount to only about 1.1% of US oil consumption, assuming the US uses about 20.7 barrels of oil a day, based on EIA data.

If we can reach 225,000 barrels of oil per day, the history of Bakken suggest this level would be short-lived - the peak production will probably last for a year or less - because as we shall see below, total Bakken production can be expected to decline to 50% or less of its peak rate within a few years, because of the steep decline rate of individual wells.

Will the Drum stooges shit all over themselves again like they did with shale gas? Time will tell; but N Dakota is already near the "considerable challenge" of 225,000 bpd, and production is up 50% since Dec. 2007.

- Brewskie


  1. They are almost certainly making the same mistake with “tight oil” like the Bakken as they made with shale gas.

    Even the USGS is probably being conservative in assuming only a ~1% recovery factor (with currently available extraction technology) on the ~300-400 billion barrels of estimated oil in place.

    If that recovery factor could be increased to just 10% it would make the thing a super giant.

  2. I honestly hope we don't use the oil shales at all and just start investing in alternative tech that exists that can replace oil use. I'm a nature guy, and it greatly saddens me to see so much wilderness destroyed by these shale extractions.