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North Dakota oil production flattens in November to 1.224 million b/d: state

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North Dakota oil production flattens in November to 1.224 million b/d: state

Highlights

Gas production also flat, less than 1% rise on month

'Slight' decline seen in December from winter storms

May be 2022 before output begins to rise steadily: director

Houston — North Dakota oil production was essentially flat month on month in November, falling just 0.5% to 1.224 million b/d, the state's Department of Mineral Resources said Jan. 15 in releasing its latest output figures.

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October's oil output was initially reported at 1.222 million b/d but was revised up to 1.231 million b/d, accounting for the slight month-on-month dip.

Gas production was also essentially flat, with less than a 1% month-on-month rise in November to 2.887 Bcf/d, said the DMR, which reports production figures on a two-month lag.

A total of 74 well completions occurred in the state in November, but by December that had dropped to 44 due to harsher winter weather conditions. Helms noted North Dakota needs 60-70 completed new wells coming on each month to maintain production of 1.2 million b/d.

North Dakota's rig count has also have dropped lately as winter weather has taken hold across the state's western production area.

In October through December, 14 rigs were active in North Dakota, but that has dropped to 11 in January, Helms said. By contrast, the all-time was 218 in May 2012.

It may be 2022 before drilling rigs start coming back and the state will be able to hold its production flat, he added.

"Certainly, by year-end calendar 2022, we should start to see production on an incline," said Helms.

Oil prices for North Dakota Light Sweet moved up about $6 to $43.50/b on Jan. 15, and WTI NYMEX was trading around $52.30/b. Those prices are "very solidly into the territory" where completing drilled but unfinished wells, known as DUCs, is economic, he said. In November, North Dakota DUCs fell by 14 on month to 710.

But Helms noted favorable prices will be counteracted by the effects of winter weather.

'Concern' over permits under Biden

As the US transitions in the coming days to the new presidential administration of Joe Biden, North Dakota has an "ongoing concern" about limits to new permits on federal lands, which Biden during his campaign had pledged to ban, Helms said.

Of the current 11 rigs in North Dakota, six are on federal lands, Helms said.

Even though Fort Berthold, one of the most prolific producing areas of the Bakken Shale in the western North Dakota, dropped two rigs recently, its oil production is up recently. In fact, all 14 DUCs completed in November came from Ft. Berthold, Helms said, adding the area has "the best rocks in the Bakken and Three Forks," which are the main producing geological zones of the play.

"It's very important that that resource gets developed," Helms said.