"North American Fracking Activity Soars To Near Pre-Pandemic Levels"

Source:

https://oilprice.com/Energy/Energy-General/North-American-Fracking-Activity-Soars-To-Near-Pre-Pandemic-Levels.html

"Fracking in North America has almost recovered to pre-pandemic levels, with the count of started frac jobs reaching a 12-month high in March 2021, a Rystad Energy report shows.

The number of completed wells in the Permian basin during the first quarter of 2021 exceeded the required output maintenance level, so oil production is set to rise in the current quarter – but will likely slow again later in the year.

Rystad Energy has already registered 967 started frac operations in North America for March 2021.

... This will bring the final count for March to about 1,064 wells – exceeding the January 2021 activity level by about 6.5%.

... While the growth in fracking activity is real, the current value is driven by detection of fracking activity on several large pads.

We believe that some frac operations on these pads will in reality be spread out across several weeks during March and April.

“The Permian was disproportionally hit by the Texas winter crisis in February and activity in the region grew significantly in March.

We have already detected 429 started frac operations in March, while February 2021 ended up at 260 wells.

Permian ... basin is set for production growth already in the second quarter,“ says Artem Abramov, head of shale research at Rystad Energy.

If we look at weekly frac job counts, however, we can see that frac rates are now trending downwards from March’s impressive recovery numbers.

... Flaring

Gas production and disposition reporting for January 2021 is now nearly complete, and we can conclude that associated wellhead gas flaring in major US liquids regions (Permian, Bakken, Eagle Ford and DJ/PRB combined) posted another sequential decline in the first month of the year.

We have seen structural declines in gas flaring since early the fourth quarter of 2020, despite a significant recovery in frac activity.

This trend emphasizes the industry’s commitment to gradually eliminate routine flaring and develop tight oil resources in an environmentally responsible manner.

As of January 2021, only 5.7% of gas was flared in the Bakken, whereas Permian flaring intensity fell to 1% – the same intensity as in the Eagle Ford regions, which historically have flared much lower shares of gas than the Permian.

... it appears that gas flaring declined again in March in both the Permian and the Bakken ...

On a quarterly basis, despite a temporary increase in February 2021, we estimate that Permian total gas flaring (upstream and midstream) declined from 300 million cfd in the fourth quarter of 2020 to 270 million cfd in the first quarter of 2021 – the lowest level since 2017.

All Permian sub-basins on the Texas side are seeing sequential declines in wellhead gas flaring, while Delaware North (New Mexico) is the only major area with a modest increase, from 43 million to 45 million cfd.

... While wellhead gas flaring intensity is going down structurally in the Permian, some trends indicate that certain operators may be moving faster than others when it comes to ESG (environmental, social and governance issues).

Private operators in the Permian accounted for about 25% of gross gas production in the basin as of 2020’s second half, but were responsible for 55% of wellhead gas flaring.

This implies that the average private operator has three to four times higher flaring intensity in the Permian than its public peers.

As public producers have gradually switched to more disciplined capital programs and introduced structural changes to their gas flaring policies, they have reduced their contribution to basin-wide gas flaring from 70% in early 2018 to 45% in the second part of 2020, while their share of basin-wide gross gas production was relatively unchanged."