Factors in predicting production, oil transport

The impact of North Dakota's rig reduction could finally leave a mark on the state's oil production figures, said Justin Kringstad, director of the North Dakota Pipeline Authority.
By The Bakken Magazine Staff | September 20, 2015

The impact of North Dakota’s rig reduction could finally leave on mark on the state’s oil production figures, said Justin Kringstad, director of the North Dakota Pipeline Authority. This summer, Kringstad developed a recorded webinar detailing elements of production in the Bakken.

Although oil production between January and June 2015 fluctuated, oil prices were not the driving factor. Winter and spring weather conditions along with drilling decision made in 2014 were the reason for the production ups and downs.

To Kringstad, June through the end of the year will reveal the impact of the state’s rig count. “The second half of 2015 is when we are going to see and feel this reduction the most,” he said. It remains to be seen if higher producing wells drilled and completed in the core of the Bakken will offset the decreased number of rigs.

And, drilled but uncompleted wells that could be brought online at any time—and add to the production total—act as a wild card. Operators have the ability to “cherry pick” certain DUCs if necessary. “Those wells that in this basket of uncompleted are, for the most part, well-positioned to be in the production mix,” he said. A real production decline may not be visible in the Bakken for up to two and a half years either, he added.

Kringstad’s role of tracking oil movement has not gotten any easier, he also said. Determining the method of oil transportation preferred by producers or midstreams is difficult.

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Tracking Oil Transport Is Hard To Do:
-  Future oil production is uncertain.
-  Market conditions are shifting.
-  Project commitments of pipe and rail companies are unknown.
-  Regulation of pipe, rail, exports, etc. is uncertain.