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Amy Dalrymple, Forum News Service, Published February 15 2013

N.D. oil production ‘back on track’ with 4.6 percent increase

BISMARCK – North Dakota’s oil production got “back on track” in December following a dip in November, and drilling activity is expected to ramp up again this spring, the Department of Mineral Resources said Friday.

The state produced 768,853 barrels per day in December, a 4.6 percent increase from the previous month and a new all-time high, according to preliminary figures from the department.

Director Lynn Helms said the state added 123 new producing wells in December, enough to increase production as well as make up for November’s 2 percent drop in production, the first decline the state reported in 19 months.

“It was exciting for us to see that the November production decline was not repeated in December,” he said.

Helms said he now can estimate that it takes about 90 new wells per month to sustain North Dakota’s current oil production and 100 or more new wells per month to increase production.

“That’s an important barometer for people who are looking at tax revenues and economic growth in the west,” Helms said.

Major operators in North Dakota have indicated they plan to bring 15 more drilling rigs into the state, likely beginning in May or June, Helms said.

That would increase the number of drilling rigs from Friday’s count of 182 to approximately 200. The record rig count was set in May 2012 at 218 rigs.

The number of idle wells waiting for hydraulic fracturing crews is now estimated at 413.

“Part of that is winter weather. Part of that is the impetus for operators to try to reduce costs,” Helms said.

Operators are putting pressure on service companies to reduce the cost of hydraulic fracturing.

This spring, Helms said he expects to see more fracking crews mobilizing to catch up and reduce the idle well count to closer to 200.

The amount of natural gas that is flared stayed at 29 percent for December, which was relatively good news considering oil production grew 4.6 percent, Helms said.

The amount of flaring, which was as high as 36 percent in September 2011, has been holding steady or ticking slightly downward every month while oil production increases.

“I do think we are on a downward trend, but we’ve just got so much work to do in this area to be where we want to be,” Helms said.