June 23, 2015

Oil production drops in April

By Kate Ruggles
Farmer Staff Writer

April’s production totals are in and they reveal a decline in production from March to April, but only for the state’s oil industry. The state’s natural gas numbers show a production increase for the month of April, an increase that is actually not too far away from the state’s record production high.
In April, North Dakota produced 1,168,636 barrels of oil per day, a decline in production of roughly 20,000 barrels per day. However, natural gas production for the month of April yielded 1,541,190 MCF per day, which was an increase of around 20,000 MCF per day. The state’s current record stands at a monthly average of 1,227,483 barrels of oil per day and 1,570,858 MCF of natural gas per day, which was reached in December of 2014.
It is also interesting to note that McKenzie County’s natural gas production showed an increase from March to April, while oil production was down. The county produced 12,410,137 barrels of oil in the month of April, and 20,795,320 MCF of natural gas. The county’s production high was also reached in December, 2014, with 13,841,792 barrels of oil and 20,956,968 MCF of natural gas having been produced.
McKenzie County continues to lead the state in production, contributing 35 percent of the state’s oil production totals and 44 percent of the state’s natural gas production.
According to Lynn Helms, director of Mineral Resources for the North Dakota Industrial Commission, the state’s drilling rig count dropped 17 from March to April, and eight more from April to May. The count has since fallen four to date, bringing the current rig count to 79.
“Operators have each been experimenting with running one to two fewer rigs than their planned 2015 minimum to see if drill times and efficiencies will continue to improve,” states Helms. “This has resulted in a current active drilling rig count that is five to eight rigs below what operators indicated would be their 2015 average if oil prices remained below $65 per barrel.”
There was also a drastic drop in well completions, with 244 completions in March, falling to 94 completions in April. Helms believes that the continued oil price weakness, which is anticipated to last into next year, is by far the primary reason for the slow-down.
At the end of April, there were an estimated 925 wells waiting on completion services, which is an increase of 45.
To maintain a production level of 1.2 million barrels per day, 110 to 120 completions must be made per month.
North Dakota continues to make progress in terms of gas capture. Helms states that operators have been working very hard to meet the state’s goals, and to date, the state continues to meet its mandate, which is currently 82 percent gas capture.
There are also still several proposed federal rules that could be put into effect and will impact oil and natural gas production in North Dakota. They involve the Clean Water Act, Safe Drinking Water Act, Clean Air Act and the Endangered Species Act.
The Obama administration is looking to implement rules regarding methane emissions, hydraulic fracturing on federal and Indian lands, the protection of several endangered species, and a request from an environmental group on the disclosure of chemical substances used in hydraulic fracturing.
In an effort to deal with several of these impending federal rules, the North Dakota Legislature passed House Bill 1432, which sets up a council to address these potential issues.