Genscape, which is a leading provider of energy information, recently estimated that June's Bakken daily oil production would skyrocket by 54,000 barrels of oil per day. That would have shattered the the previous record monthly gain of 41,000 barrels of oil per day set in February. It turned out that Genscape was way off as production only grew by 10,000 barrels per day. However, the gusher it predicted could still come real soon.
There are currently just over 9,000 wells in North Dakota producing a little more than 821,000 barrels per day. However, due to the conversion to pad drilling as well as persistent wet weather, it has created a backlog of nearly 500 wells waiting to be completed. As the industry works off that backlog it has the potential to unleash a massive amount of initial oil production.
Looking at Bakken producers last quarter, there was a fairly consistent theme of production being held back by this backlog. For example, Oasis Petroleum (NYSE:OAS) noted that its production was virtually flat last quarter at 30,171 barrels of oil equivalent per day. However, the company sees its production jumping by 10% next quarter as more wells come online. Oasis had 37 wells drilled but not completed and its sees completions next quarter in a range of 40-45 after just completing 51 wells in the first half of the year.
Oasis is not alone. ConocoPhillips (NYSE:COP) also noted that its production was held back by the wet weather. The company saw just a measly 3% growth quarter-over-quarter to an average of 30,000 barrels of oil per day. However, looking ahead the company has plans to grow its production by at least 50% to 45,000 barrels of oil per day by 2017. Now that the weather has cleared, more of Conoco's newly drilled wells can start coming online and boosting its production.
Even top Bakken driller Continental Resources (NYSE:CLR) noted that its backlog of drilled but not completed wells stood at 75 at the end of this past quarter. For perspective, that same quarter the company had completed 73 net wells, which enabled it to boost production by 14% on the quarter to 88,000 barrels of oil equivalent per day. That large inventory of uncompleted wells, in addition to the company's plans to run 20 rigs, has it increasing the lower end of its production growth forecasts from 35% to 38% this year. That's solid growth, especially in light of the fact that Continental is already the region's top producer.
Producers should continue to see big gains from the Bakken, especially as the large backlog of previously drilled wells get completed. For investors this means that third quarter production numbers, and therefore profits, could see a nice boost as these wells come online. That's especially true as oil remains well over $100 per barrel, making it a great time for producers to bring additional oil supplies to the market.