One of my favorite pastimes is reading the monthly Director’s Cut from Lynn Helms. It is like those “You Might Be a Redneck If…” jokes, except it goes like this… “You Might Work in The Energy Sector If…you get excited to read the monthly Director’s Cut.”
The Director’s Cut reports go
back to 2010 and are released monthly.
The full archive can be found here. They look back and discuss in detail the
prior months’ production, rig count, completions, etc. In addition, they provide a helpful section
called “Agency Updates” which breaks down all of the goings on in the Bureau of
Indian Affairs (“BIA”), Bureau of Land Management (“BLM”), Environmental
Protection Agency (“EPA”), U.S. Forest Service, etc.
The most recent Director’s Cut
reports provide us with a positive outlook for the oil and gas industry in
North Dakota. North Dakota production levels
are reaching record highs…F
To wet your whistle with North
Dakota stats, according to the U.S. Energy
Information Administration (“EIA”)’s Drilling Productivity Report released
on December 17, 2018, which can be found here, the Bakken region produced 1,443 thousand
barrels of oil/day in December of 2018 and is expected to produce 1,461 thousand barrels of oil/day in
January of 2019.
Now, to the Director’s Cut
November 2018 Director’s Cut
The main takeaway from the November,
2018 Director’s Cut is that production
records were being set. Specifically, record oil and gas production levels
were achieved in September of 2018 – hitting new all-time highs for oil
production, gas production and producing wells.
In addition, the November,
2018 Director’s Cut provides the following:
- Over 99% of drilling now targets the Bakken and
Three Forks formations
- Drilling permit activity increased significantly
from September to October 2018
Similarly, the December,
2018 Director’s Cut provides that new records were again reached. Record oil and gas production levels were
again hit in October, 2018 – new all-time highs for oil production, gas
production and producing wells were again hit.
2018 Director’s Cut also provides that the November rig count was down
slightly, but that as of the release date of the report on December 14, 2018,
it was back up to October’s level, and that estimated wells waiting on
completion is 959, up 31 from the end of September to the end of October.
The January, 2019 Director’s Cut reflects a slight decline in oil and gas production from October to November; also, the number of producing wells is also down from October to November.
The Takeaway: The Director’s Cuts are a great resource. The December, 2018 Director’s Cut provides some insight into the optimistic outlook for North Dakota production and also details the production records that have been reached. Specifically, the December, 2018 Director’s Cut provides that, “Operators continue to maintain a [drilling] permit inventory that will accommodate varying oil prices for the next 12 months.” Good news!