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Director of North Dakota Department of Mineral Resources says 1 million barrels possible…dependent on weather

Late this year or very early next year, oil production in the Williston Basin could reach a major milestone: 1 million barrels per day. In August, Lynn Helms, director of the North Dakota Department of Mineral Resources, reported during his monthly director’s cut press conference that production numbers exceeded the 900,000 barrel per day threshold, noting that in May 2013, North Dakota production numbers had just passed 800,000 bpd. As of September, the DMR reports 183 drilling rigs are in operation, with another 9 rigs scheduled to enter the region in the next few months. August well-count numbers indicate a record high number of wells at 9,452 producing wells, with 95 percent of drilling targeting the Bakken and Three Forks formations.

Although oil production in the Bakken and Three Forks will push the Williston Basin over the 1 million bpd threshold, Helms pointed to a decrease in well completions as a major factor inhibiting production from reaching 1 million bpd. In August, the number of well completions fell from 251 to 130. “The big item and the one I haven’t had the answer too is why well completions fell so much,” he said during his monthly director’s cut. According to Helms, difficult road conditions and weather could have played a major role in the major decline in well completions.

To solidify his assumption, an unnamed well completion company operating in the Williston Basin called into Helms and confirmed his suspicion during the director’s cut webinar. Following a brief phone call, Helms got back to the conference call podium and explained that a two-inch rain in August caused several well completions to be postponed as operating conditions were too muddy. Several completion jobs scheduled for August were also linked to multi-well pads. According to Helms, those multi-well pad jobs were behind schedule on drilling which in turn pushed scheduled frack jobs behind schedule. And, most companies prefer not to drill and complete a well while a rig is on the well pad due to safety concerns.

Past production complications related to weather also appear to be a possibility in the near future as well. Although October is typically a prime time period for production and for large-scale earth moving equipment transport required to prepare pads for winter drilling because of stable October weather, recent rains in McKenzie County have caused road shutdowns. The result of those road shutdowns, Helms said, will be a 10 percent reduction in working days. The road restrictions have left some drilling rigs stranded on a well pad, and only a handful of saltwater transport operations have been allowed to move on the roads. The restrictions could last for a few days.

The government shutdown will not have as much of an impact on production as weather. If the shutdown does last for another few weeks however, the Bureau of Land Management could be impacted in the permitting process, Helms said.

There are currently 450 wells waiting on completion services. Over the last ten years, Helms also said, “it is amazing to that in 10 years our production went up 11-fold,” an increase he added is a big deal in the oil and gas industry.

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