The latest monthly "Director's Cut" summary by NDIC Mineral Resources Director Lynn Helms has been published on the NDIC website. Helms notes that the 1.4% increase in production from June to July was the smallest month-to-month gain since April 2011 and offers an explanation...
"The combined effect of several factors has led to a noticeable slowing of activity and production growth. Rig count has decreased significantly to around 190-195 as operators transition to higher efficiency rigs and implement cost cutting measures. The idle well count increased significantly indicating an estimated 394 wells waiting on fracturing services. Rapidly escalating costs have consumed capital spending budgets faster than many companies anticipated and uncertainty surrounding future federal policies on hydraulic fracturing is impacting capital investment decisions."
Other highlights from the report....
• Crude oil take away via pipeline is now less than 45% of daily production, but rail and truck transportation are adequate to keep up with near term production projections.
• Rig count has dropped 11% from its May 2012 high.
• Drilling permit activity has increased as more multi-well pads are being drilled and locations need to be built before winter weather comes.
To read the entire report, click here.
"The combined effect of several factors has led to a noticeable slowing of activity and production growth. Rig count has decreased significantly to around 190-195 as operators transition to higher efficiency rigs and implement cost cutting measures. The idle well count increased significantly indicating an estimated 394 wells waiting on fracturing services. Rapidly escalating costs have consumed capital spending budgets faster than many companies anticipated and uncertainty surrounding future federal policies on hydraulic fracturing is impacting capital investment decisions."
Other highlights from the report....
• Crude oil take away via pipeline is now less than 45% of daily production, but rail and truck transportation are adequate to keep up with near term production projections.
• Rig count has dropped 11% from its May 2012 high.
• Drilling permit activity has increased as more multi-well pads are being drilled and locations need to be built before winter weather comes.
To read the entire report, click here.
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