[shallow sand]

Continental showed average differential on crude of $11.77 for third quarter 2014. They didn't break it down between Northern region and OK region, however it appears that about 75% of oil came from Northern region. Assuming they receive $3 per bbl less than NYMEX WTI in OK, it appears their differential is between $14-$15 per bbl on Northern region crude, which is almost all Bakken. Continental being one of the largest volume producers in the Bakken, likely gets the best volume bonus. Therefore, I would say using no more than $4 per bbl over the Plains posted price from their price bulletins is probably accurate. Whether they are picking up any extra through gathering efforts, I do not know. However, if anyone has better information on this than me, please let me know.

[copious.abundance]

I read recently that something like 20% of the oil refineries in Washington state (where I live) are processing these days comes from ND. I doubt producers in ND are getting the same price from refineries in Washington as they are from, say, refineries in Texas, where there is already a glut of light, sweet crude thanks to production in the Eagleford and Permian.

Granted, shipping costs to Washington are probably higher than to Texas, but I would think it would still be more profitable to ship to Washington.

On the east coast, refineries are paying Brent-eque prices for Bakken crude:
http://www.platts.com/IM.Platts.Content ... -north.pdf
$this->bbcode_second_pass_quote('', 'R')ail deliveries of Bakken Blend to the US Atlantic Coast were 210,000 b/d at the end of 2013 and could be as much as 350,000 b/d by end of 2014, according to Bentek. Some of these shipments, in a departure from standard practices for domestic crudes, have been sold on a Brent-related basis, as these barrels are competing with Brent-related imports.

[Synapsid]

Oh, copious, you've done it now--mentioned Washington refineries. How could you? ROCKMAN will be here any minute.

And I was enjoying a sunny morning.

[shallow sand]

We may get to see how the Bakken fairs in a lower price environment. Without a doubt it has been a surprising run up to over 1 million bbl per day. It, along with the Eagle Ford and Permian production could be victims of their own success. As we continue down in oil price, I assume Bakken will be the first to cut back due to the transportation costs in relation to Texas. The recent expansion of production in CO & WY will also likely hit a bump before Eagle Ford & Permian.

Is there anyone working in the Bakken who visits this site? Would be interested in your comments given the fall in crude prices.

[JohnnyOnTheFarm]

$this->bbcode_second_pass_quote('shallow sand', 'W')e may get to see how the Bakken fairs in a lower price environment. Without a doubt it has been a surprising run up to over 1 million bbl per day. It, along with the Eagle Ford and Permian production could be victims of their own success.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'U')ltimately, this kind of shakeup in price is a good thing for producers,

[shallow sand]

Its not just how low, but for how long. 2008-2009 happened pretty fast compared to 1986-1998. I hope it is the former.

[Pops]

$this->bbcode_second_pass_quote('', '
')A stark breakdown from North Dakota projecting how falling oil prices could affect production was formulated using proprietary corporate data and a state official’s personal model.

Late last Thursday, the Department of Mineral Resources caused a stir in world oil markets by releasing slides from a presentation to the state legislature that included a range of output forecasts based on different oil price scenarios, including one showing production would begin to decline by the middle of this year if crude prices remained at current levels.

The projections presented by Lynn Helms, head of the state’s energy regulatory agency, cut to the quick of a pivotal question for global oil traders and executives: How quickly will U.S. shale producers, particularly those in the booming Bakken of North Dakota, respond to the collapse in oil prices?

While consultants and analysts have been frantically reviewing and updating their own “cost curve” models, attempting to predict a potential turning point in the market at which shale growth will begin to stall and oil markets stabilize, this was the first such forecast from the heartland of fracking – and it appeared to be markedly more pessimistic than many.

Most analysts expect U.S. oil production to continue growing this year, powered partly by the Bakken, even if prices remain low. But Helms’ analysis suggested North Dakota production would flatline at around 1.2 million barrels per day (bpd) even at a $65 a barrel wellhead price, which translates into around $75 for U.S. futures that are now below $50.

[Subjectivist]

That pretty much lines up with what several of the members here have been predicting. Easy money lead to crazy junk bond drilling boom that is unsupportable under $75-80 a barrel WTI.

[rockdoc123]

I think you need to look at the presentation. Whether one agrees with it or not it is suggesting that a substantial amount of ND shale breakeven at prices of $50 or less. The drop in daily production forecast to 2017 is significant at $50 but looks like there is still activity.

The author doesn't show how he came up with his breakeven price scenario so difficult to verify.

[Pops]

The EIA is forecasting $63/bbl WTI this year and Ron @ PeakOilBarrel made this chart from their short term outlook forecast ...

[Beery1]

$this->bbcode_second_pass_quote('Beery1', '')$this->bbcode_second_pass_quote('copious.abundance', 'H')ere was a really funny one. We're two years into your 3-year timeline!
Posted Jul 31, 2012
$this->bbcode_second_pass_quote('', 'O')ver the next three years, I'm getting a big bowl of popcorn and I'm going to watch the cornies backpedalling and denying as their dreams of abundance and energy independence evaporate. It's going to be awesome! I wonder how they'll spin it when their fantasies are laid bare?

[Subjectivist]

Found two sources for recent Bakken production because Beery made my curiosity bump itch.

$this->bbcode_second_pass_quote('', 'C')rude oil production in the North Dakota section of the Bakken shale formation of the Williston Basin averaged 1.2 million b/d in December, Bentek data showed. This was 296,000 b/d higher than levels seen in December 2013.

[copious.abundance]

$this->bbcode_second_pass_quote('Beery1', 'S')o how is the Bakken doing now, as we go into 2015? Are the cornies backpedaling yet? Somehow, I think not, even though it's becoming pretty clear that the Bakken bubble is on the verge of collapse.

$this->bbcode_second_pass_quote('Subjectivist', 'F')ound two sources for recent Bakken production because Beery made my curiosity bump itch.

$this->bbcode_second_pass_quote('', 'C')rude oil production in the North Dakota section of the Bakken shale formation of the Williston Basin averaged 1.2 million b/d in December, Bentek data showed. This was 296,000 b/d higher than levels seen in December 2013.

[copious.abundance]

1.227 million barrels/day in December

[shallow sand]

I guess in a conference call about the Feb, 2015 directors cut, Lynn Helms stated that ND production might plateau soon if well drilling and completions continue to slow.

The Williston Basin, along with the Permian, Eagle Ford shale and some others, has transformed the US onshore oil industry, just as the Marcellus and other areas have natural gas. Now the companies in these areas are victims of their own success, to quote Harold Hamm.

Even in places where wells are economic at $50 oil and $2.50 gas, the operators there cannot be happy with current prices. Reductions in costs will not make up for the large decrease in revenue. Several months ago, KSA officials started to rumble that US and Canada would need to cut production. It appears that may happen. 2015 will be interesting.

[Subjectivist]

A new piece by Financial Times, much more at link below. Not really sure what to make of it, what do you folks in the industry think?
.
$this->bbcode_second_pass_quote('', 'T')he price fall has been like a bucket of cold water in the face for Williston and other oil boom towns, waking them up from the frenzy of the past half-decade to a more sober reality. The US oil industry is battling to adapt and survive in these new harsher conditions. The future of world oil markets and, hence, of the world economy, hangs on its success.
The ‘Apple of oil’
Mark Papa remembers the precise moment he decided the American oil renaissance had to happen. Avuncular and mildly spoken, he is the antithesis of the stereotypical two-fisted Texas oilman. But the company he led until the end of 2013, EOG Resources, has been one of the great success stories of the boom, dubbed “the Apple of oil” by the analyst Paul Sankey because of its ability to translate innovation into a profitable business.
EOG came from the most unpromising of beginnings. Its original name was Enron Oil & Gas Company and, until 1999, it was majority owned by Enron, the fraudulent energy group that collapsed in 2001. Having secured EOG’s independence just in time, though, Papa led it to a strong position in the fast-growing shale gas industry.
Innovations driven by an industry veteran called George Mitchell had made it possible for the first time to produce gas at commercially viable rates from formations such as the Barnett Shale of north Texas. EOG was an early adopter of the technology, discovering abundant reserves of shale gas that would provide fuel for power generation and heating, and raw materials for the petrochemicals industry. Unfortunately, many other companies were doing the same.
“The amounts of shale gas that were being uncovered [in 2002-06] were just astonishing,” says Papa, now a partner at the private equity firm Riverstone Holdings. “It was very obvious that there had been just a huge breakthrough in technology, and the amounts of commercial gas available in North America were absolutely mind-boggling.”

[PeakOiler]

According to the EIA,
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm

North Dakota (esp. Bakken) oil production was 1,190 kbpd in January.

I'll wait a few more months and see if it's time to start a "Declining Production in N. Dakota" thread.