November 18, 2009

Oil activity is on the rise with good things expected for 2010

By Tina Foreman
Farmer Staff Writer

The past year has been a long and bumpy one for the oil industry in North Dakota with McKenzie County being no exception. However, looking at activity in recent months compared to one year ago, things appear to be heading in the right direction.
“McKenzie County has become a real hot spot with production increasing rapidly,” says Ron Ness, North Dakota Petroleum Council president. “The increase is due to multiple factors, but part of it in McKenzie County is due to the excitement surrounding the Three Forks Formation, especially in areas where the Bakken has not been economical.”
The verdict is still out on whether the oil in the Three Forks Formation has seeped from the Bakken Formation or if it is a separate pool. But either way, the Three Forks Formation has added to McKenzie County’s exploration and production.         
“We’re seeing increases in drilling activity in McKenzie, Divide and Mountrail counties,” says Lynn Helms, North Dakota Department of Mineral Resources director. “The number one driver is oil price, which has come up $10 per barrel since July. The recent increase in Three Forks exploration is the second factor, along with recent export capacity, which is expected to increase in December, February and April.”                                                  
McKenzie County has noticed an increase from four active drilling rigs to 11 in just over a week. This number is still only half what it was in October 2008 when there were 22 active drilling rigs. But with an increase of over 50 percent in one week, it’s likely that the number will surpass 22 before long.
“We are expecting to set a new record for annual production in 2009 ,and the future looks bright for more and more production to come,” adds Ness.
According to Helms, North Dakota is currently ranked a solid fourth in oil production behind Texas, Alaska and California, with McKenzie County holding the third spot in the state behind Mountrail and Bowman counties.
In September, oil production was approaching 235,000 barrels per day compared to the 2008 high of 215,000 barrels per day.
“Production through September is 57.4 million plus over seven million per month,” says Helms. “At that rate, we should end the year at 78 to 80 million.”
 With increases to infrastructure including more options for exporting oil, both Ness and Helms are expecting increases to continue with good things to come for 2010.