North Dakota Oil Production Falls to Lowest Since January

North Dakota’s crude oil production declined by about 50,000 barrels per day (bpd) in May compared to April, marking the lowest monthly output in the state since the freeze in January which curtailed output.

Oil production in North Dakota stood at 1.195 million bpd in May, down by 3.9% from 1.24 million in April, the North Dakota Department of Mineral Resources said in its monthly release on Tuesday.

The decline in May production was “a little surprising” but likely due to the road restrictions still in place and lower-than-expected completion numbers, Mark Bohrer, Assistant Director at the department, said.

Natural gas production, however, increased in North Dakota, home to the Bakken shale, in May, the assistant director added.

North Dakota’s oil production in May fell to the lowest level since January this year, when extreme cold in the middle of January nearly halved crude production in the state. Due to freezing temperatures, a number of operational issues at production sites arose.

In May, 97% of North Dakota’s oil output came from the Bakken and Three Forks formations, and just 3% from legacy conventional pools, the North Dakota Department of Mineral Resources said.

The drilling rig count was at 37 in May and June, rising to 39 as of mid-July, the data showed.

Yet, it is a fairly low number and according to Bohrer, it is due to mergers and acquisitions. The rig count is expected to return to the mid-forties with a gradual increase expected over the next two years, the assistant director said.

There are 14 frac crews currently active in North Dakota.

Drilling activity is expected to increase slightly and operators continue to maintain a permit inventory of approximately 12 months, the ND department said.

Completed wells numbered 55 in June, according to preliminary data, down from 67 in May.

“We need that to be in the 90-100 range to achieve production growth,” Bohrer said.

By Tsvetana Paraskova for Oilprice.com

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