According to a Rystad Energy survey, fracking in North America has nearly recovered to pre-pandemic levels, with the number of started frac jobs hitting a 12-month high in March 2021.

Since the number of finished wells in the Permian basin surpassed the necessary output maintenance amount in the first quarter of 2021, oil production is expected to increase in the current quarter before slowing later in the year.

In North America, Rystad Energy has already reported 967 started frac operations for March 2021. We calculated that around 97 jobs are yet to be identified if the current pace of frac activity is sustained for the rest of the month, due to inadequate satellite data coverage for the past couple of days. This brings the total number of wells drilled in March to about 1,064 a 6.5 % increase over January 2021.

Almost all major basins, including the Permian, are equipped for at least production maintenance in the second quarter of the year, if not some sequential production development. The Bakken and Anadarko regions are the only exceptions, where operators may struggle to cope with the base decline this quarter. The Niobrara's frac count for March may have been exaggerated. Although fracking activity is increasing, the present price is influenced by the discovery of fracking activity on several large sites.

“The Permian was disproportionally hit by the Texas winter crisis in February, and activity in the area rose dramatically in March,” said Artem Abramov, head of shale research at Rystad Energy. In March, we discovered 429 wells that had begun frac operations, while February 2021 saw 260 wells. Maintenance of Permian oil output currently necessitates around 300 unconventional well completions each month, indicating that the basin is positioned for production growth as early as the second quarter.

The two-week average frac count has fallen from over 100 in mid-March to 65 now, well beneath the production maintenance mark. If the current trend persists, the Permian production rebound in the second quarter may not be sustainable.

Since October 2020, monthly frac operation in other oil regions has fluctuated between 200 and 230 wells per month, with no signs of slowing down. In week 13, the two-week average frac count increased from 51 to 63.

We can infer that related wellhead gas flaring in major US liquids regions (Permian, Bakken, Eagle Ford, and DJ/PRB combined) decreased sequentially in January 2021.

Despite a strong recovery in frac production, we've seen structural reductions in gas flaring since the early fourth quarter of 2020. This pattern highlights the industry's commitment to gradually phase out routine flaring and grow tight oil supplies in an environmentally conscious manner.

Just 5.7 % of gas was flared in the Bakken as of January 2021, while Permian flaring rate dropped to 1% — the same as the Eagle Ford areas, which have traditionally flared much lower shares of gas than the Permian. 

We expect to see a temporary increase in Permian gas flaring when complete February 2021 data is released, as satellite data shows a strong jump during the winter crisis.

However, it appears that gas flaring in both the Permian and Bakken decreased in March, and we will most likely see a recorded flared gas volume for March that is close to the January stage.

We calculated that Permian total gas flaring (upstream and midstream) decreased from 300 million cfd in the fourth quarter of 2020 to 270 million cfd in the first quarter of 2021, the lowest amount since 2017.

On the Texas side, all Permian sub-basins have seen concurrent decreases in wellhead gas flaring, with Delaware North (New Mexico) being the only major region to see a small rise, from 43 million to 45 million cfd. Though activity and output levels on the Permian's New Mexico side have remained exceptionally robust, gas flaring in the Delaware North has steadily increased since the second quarter of 2020.

Although the Permian's wellhead gas flaring intensity is decreasing functionally, some patterns suggest that some operators are moving faster than others when it comes to ESG (environmental, social and governance issues). As of the second half of 2020, private operators in the Permian accounted for around 25% of gross gas output in the basin, but 55 % of wellhead gas flaring.

As public producers gradually transitioned to more disciplined capital programmes and implemented systemic improvements to their gas flaring policies, their contribution to basin-wide gas flaring decreased from 70% in early 2018 to 45% in the second half of 2020, while their share of basin-wide gross gas output remained relatively unchanged. Rystad Energy is a company based in Rystad, Norway.