North Dakota Breaks Records for Oil & Gas Activity - Sep. 2014

November 20, 2014 Kirk Eggleston

The State of North Dakota hit 1,184,635 b/d oil in September 2014, setting a new record, according to the Department of Mineral Resources’ (DMR) November Director's Cut. That's 50,000 more b/d than August. During the same month, North Dakota also had record monthly gas production (1,403,448 mcf/d), and reported the highest number of producing wells to date (11,741).

But this month, the state's record breaking oil and gas activity is overshadowed by falling crude oil prices. September was a relatively good month for oil at ~93.00 on average for a barrel of West Texas Intermediate (WTI), but prices have dropped nearly ~$20 in the last two months.

According to the DMR's report, released on November 14, 2014, the current rig count is down 15% in the states five most active counties:

Divide - down 54%
Dunn - down 29%
McKenzie - down 4%
Mountrail - down 24%
Williams- down 19%

DMR Director Lynn Helms blames the recent drop in the Bakken rig count directly on lower oil prices. The cost of drilling a Bakken well is high - anywhere between $8-million to $9-million. If the price of oil continues to fall, some producers, depending on their location in the play and a host of other factors, will scale back their Bakken drilling programs.

Flaring Down in North Dakota Bakken

The natural gas flaring rate dropped from 27% in August to 24% in September. By comparison, the highest flared percent of natural gas was 36% in September of 2011.

New regulations have called for producers to reduce flaring to below 26%, starting with their October production figures. Helms recently pointed out that in addition to lower oil prices, flaring regulations could also impact Bakken development, because producers may face production restrictions if they fail to meet the new standards.

Beginning on June 1st, the North Dakota Industrial Commission (NDIC) began implementing its first in a series of policy changes aimed at reducing flaring in the Bakken.

Seismic Activity Up in North Dakota Bakken, But Leasing is Down

Seismic activity is up with seven surveys active or recording and five permitted. New leasing on the other hand has dropped off sharply. Most leases consist of renewals and top leases in the Bakken - Three Forks area.

North Dakota Hits Record Oil & Gas Production - June 2014

August 20, 2014 Kirk Eggleston

The State of North Dakota hit nearly 1.1-million b/d oil in June 2014, setting a new record, according to the Department of Mineral Resources' (DMR) August Director's Cut. During the same month, North Dakota also had record monthly gas production (1,253,154 mcf/d), and the highest recorded number of producing wells (11,079).

In April, North Dakota crossed the milestone 1-million b/d oil mark. The Bakken region, which includes portions of western Montana, exceeded the 1-million b/d mark at end of last year according to the Energy Information Administration (EIA). It is the fourth region, along with the Gulf of Mexico, Eagle Ford, and Permian basins, producing more than 1 million b/d in the nation.

About 28% of gas produced in May and June was flared, despite the completion of Hess' Tioga Gas Plant expansion in May 2014. DMR officials noted the plant has been operating below full capacity due to the delayed expansion of gas gathering from South of Lake Sakakawea.

The expansion project, which is part of a $1.5 billion investment Hess has made in the area for infrastructure improvements, began processing about 120-million standard cubic feet of gas per day (mmscf/d) in May, according to Hess. The company expects the plant will process at least 250 mmscf/d with the potential to increase beyond 300 mmscf/d.

Highlights from August 2014 Director’s Cut

May Oil – 1,040,469 b/d
June Oil – 1,092,617 b/d
May Gas – 1,192,860 mcf/d
June Gas – 1,253,154 mcf/d
May Producing Wells – 10,902
June Producing Wells – 11,079
28% of produced gas in May and June flared

North Dakota Hits the 1-Million b/d Mark

June 18, 2014 Kirk Eggleston

The State of North Dakota has surpassed the 1-million b/d oil mark according to the North Dakota Industrial Commission's (NDIC) Department of Mineral Resources (DMR), thanks mostly to the Bakken Shale and Three Forks formation.

The preliminary data, released in the monthly Director's Cut in June of 2014, revealed April oil production was 1,001,149 b/d. North Dakota is second only to Texas for oil production.

It's certain poor weather conditions at the end of 2013 and the beginning of this year prevented the production milestone from being hit sooner. According to North Dakota officials, in the month of February, there were 18 days with temperatures five or more degrees below normal. Four days were recorded where wind gusts were too high for completion work. Despite the poor weather, the state set a new record for the number of producing wells (10,186) in February. In April, North Dakota broke that record again, with 10,658 producing wells. By contrast, at the onset of the shale revolution in 2008, the state only had ~3,600 producing wells.

The Bakken region, which includes portions of western Montana, exceeded the 1-million b/d mark at end of last year according to the Energy Information Administration (EIA). It is the fourth region, along with the Gulf of Mexico, Eagle Ford, and Permian basins, producing more than 1 million b/d in the nation.

In April of 2014, Continental Resources, the Bakken's largest producer, cited IHS data revealing the Bakken field of North Dakota and Montana reached another milestone of 1 billion bbls of cumulative light, sweet crude oil produced during first quarter of 2014. According to Continental officials, two-thirds of the oil has been produced since 2011.

Highlights from June 2014 Director's Cut

Mar Oil - 977,178
Apr Oil - 1,001,149 b/d
Mar Gas - 1,085,631 mcf/d
Apr Gas - 1,133,742 mcf/d
Mar Producing Wells - 10,472
Apr Producing Wells - 10,658
ND leasing activity is low consisting mostly of renewals and top leases in the Bakken - Three Forks area

Bakken Production Sets Another Record - More Than 10,000 ND Wells Producing

January 15, 2014 Kirk Eggleston

The Bakken and Three Forks region are on the verge of joining an elite fraternity that only ten (10) other oilfields in the world have enjoyed - the 1-million b/d club.

Daily production in the Bakken and Three Forks region of North Dakota continues to grow at a rapid pace.

The month of November certainly indicated that the 1-million b/d target seems to be well within reach, with 908,384 b/d coming from the Bakken and Three Forks in North Dakota alone, and also accounting for 93% of state-wide production. Total state-wide production in November accounted for 973,045 b/d. For more on the most up-to-date statistics on the Bakken and Three Forks region, see the North Dakota Industrial Commission (NDIC) Director's Cut for January.

In-line with the state-wide increase in production, North Dakota set an all-time record high for the number of producing wells with 10,023. The state has 10,000 producing wells for the first time ever!

Williston Basin Sweet Crude prices are down over the past few months. The price quoted in the directors cut dropped from $85.16/barrel in October to $71.42 in November. Prices have remained relatively flat however since then.

Quick Glance:

Oil production up to 973,045 b/d in Nov from 945,182 b/d in Oct
Gas production estimated at 1.08 Bcf/d with 30% flared in November
Flaring was up 2% due to a Tioga Plant closure during the month
Permitting has held flat at ~230 per month in Nov and Dec
Williston crude prices are down Oct = $85.16/bbl, Nov = $71.42/bbl, Dec = $73.47/bbl
Natural gas prices delivered to the Northern Border Pipelin at Watford city are up to $3.86/mcf
10,023 wells producing in the state
Average ND rig count up from 184 in Nov to 190 in Dec

North Dakota Production Will Surpass 1 Million b/d Early in 2014

December 17, 2013 R.T. Dukes

North Dakota oil production grew a little less than 10,000 b/d from September to October to set another record with 941,637 b/d.

With current weather conditions, it will take an exceptional November and December for the state to surpass 1 million b/d before year-end. The Bakken has surprised us before, but it looks like it will be some point in the first quarter before North Dakota joins the million barrel a day club.

The state also set a record in October for natural gas production with 1.07 bcf/d and for the number of producing wells with 9,900. With ~200 wells coming online per month, the state will easily surpass 10,000 wells before the end of 2013. Pretty amazing for a state that had just ~3,600 producing wells at the beginning of 2008.

Other highlights from the monthly director's cut include:

5,939 wells producing from the Bakken and Three Forks
October sweet crude prices fell to $85.16/bbl and further to $71.42/bbl in November
202 well completions in October
McKenzie County roads were close 3-4 days due to rain in October
Operators have indicated plans to add 10-15 rigs by mid-year 2014
Days from spud to initial production increased to 114 days from 100 days in October
More than 95% of drilling targets the Bakken and Three Forks
~460 wells were awaiting completion at the end of October

Read the full director's cut at dmr.nd.gov