Oil production in North Dakota declined by approximately 37,000 barrels per day in January and the number of wells awaiting completion continues to grow, reports the Bismarck Tribune.
Regulators are attributing these figures to low oil prices. The North Dakota Department of Natural Resources released the preliminary production figures for January earlier this week. January production was reported to be 1.19 million barrels per day, down from December’s production level of 1.23 million barrels per day. As reported by the Tribune, Director of the Department of Mineral Resources Lynn Helms said, “We’re going to see some months of declining production.”
Companies are continuing to cut budgets and consolidate their operations to the core of the Bakken formation. As of Thursday, North Dakota’s rig count dropped to 111, down by more than 50 from last summer. While the rig count drops, the amount of wells waiting to be hydraulically fracked continues to grow. In December, there were 750 wells awaiting completion. For the month of January, the number of wells waiting to be fracked sits at around 825. Helms told the Tribune, “That inventory of wells continues to grow and grow and grow … until they can see a little better oil prices.”
Despite the decreased production levels, the percentage of natural gas being flared off dropped from 24 percent in December to 22 percent in January. Last year, the Industrial Commission set goals to reduce the amount of gas flared to 26 percent by October 1. The next largest target was to reduce flaring to 23 percent in January. Helms said that part of this was due to improved infrastructure as well as voluntary restrictions on production.
Helms also recently retracted his optimism regarding a climb in oil prices. Last month he stated, with a degree of certainty, that North Dakota would be able to avoid the larger tax trigger, which would save the state from losing billions of dollars in lost oil tax revenue for the 2015-17 biennium. He added that this can mostly be attributed to the increasing stockpiles of crude oil. The glut of stored oil could increase the discount of Bakken crude to more than the current $10 per barrel, which could also impact North Dakota drilling activity.