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 reports…
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
December 2018 Director’s Cut
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.
The December, 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.
January 2019 Director’s Cut
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!