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Natural Gas | Oil

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North Dakota oil output totals 1.39 million b/d in March, up 4% on month: state

Highlights

March oil output not a record, but not far below

Favorable weather sets stage for production growth

Better well completions get higher oil, gas yields

Houston — North Dakota oil production in March totaled 1.39 million b/d, up 4% from February, but still below the all-time high earlier in the year, the state's Department of Mineral Resources said Wednesday.

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Natural gas production, though, hit an all-time high of 2.8 Bcf/d, up 6% from February, Lynn Helms, the state's oil and gas director, said during a monthly production webinar.

"That was a pretty good recovery [on the oil side], up almost 55,000 b/d from February," Helms said. "But we're still about 13,000 b/d shy of the record set in January."

That all-time high monthly average production for oil was 1.403 million b/d. The state is one of the largest oil producers in the US, and home to the bulk of production from the Bakken Shale, an unconventional crude formation.

Helms noted that weather in North Dakota for February and the first half of March was "brutal," with temperatures well below zero. Even around March 9, wind chills were 50 degrees below zero.

But starting mid-March, favorable weather has reigned in the state, Helms said.

OIL OUTPUT POISED FOR A RECORD

As a result, "I anticipate that starting with [the April report], we'll get back to setting records," he said.

While he did not officially give a reason for the high gas production in March, Helms said new completion technology is causing volumes to rise for North Dakota wells.

He cited one well in the state's Antelope field that recently came online at 10,000 b/d of oil -- one of the highest initial production rates ever recorded for a US well. Antelope field has been producing since 1952, Helms said.

But even apart from that, domestic unconventional wells in generally are producing increasing yields of oil and gas from improved well-completion techniques.

And for gas, "they're seeing the same kind of well performance in Appalachia and the Anadarko Basin [in Oklahoma] that we're seeing here," Helms said. "They're no longer shocked in Pennsylvania when a new horizontal well ... comes in at 100,000 Mcf/d."

HIGH GAS VOLUMES

"There is just so much natural gas [being produced] that prices are weak and going to stay pretty weak" going forward, he added.

Horizontal wells still decline much more rapidly than conventional wells, but they're starting out much higher than they did a few years ago, he said.

"Completions are really holding up and sustaining significantly higher production rates," he said.

With the advent of better weather in late March, the number of well completions jumped by 74 from February to 968, Helms said.

And with load restrictions coming off state roads, the number of working hydraulic fracturing crews is rising -- back into the mid-20s at the end of March and climbing, he said.

"We ought to see 40 to 50 frac crews operating in North Dakota through the summer," he said.

Also, the state's rig count on Wednesday was 65, up from April's 63, but below the 66 working in March.

-- Starr Spencer, starr.spencer@spglobal.com

-- Edited by Gary Gentile, newsdesk@spglobal.com