Another ND oil record set in August: State pumps more than 701K barrels per day
GRAND FORKS -- North Dakota's oil production set another record in August, averaging 701,134 barrels a day, according to the state Department of Mineral Resources on Wednesday.
That's 57 percent more than a year ago and five times more than five years ago.
More than 11 percent of the nation's total crude oil production of 6.1 million barrels a day is now produced in North Dakota, which is No. 2 among oil-producing states, according to the U.S. Energy Information Administration.
North Dakota's previous record of 674,000 barrels a day was set in July. August figures are the latest from the state.
No. 1 oil producer Texas has seen oil production rise for several years, hitting 1.9 million barrels a day in July, said the EIA. Nos. 3 and 4, Alaska and California, respectively, continue to see slumping production, remaining below 600,000 barrels a day.
The increased production in North Dakota comes at an advantageous time.
The price for sweet crude from the state's Bakken Formation had been running at a premium to the U.S. benchmark West Texas Intermediate crude because of the higher cost of transporting the oil to coastal terminals.
Due to a big upgrade in rail transportation out of North Dakota over the past six months or so, the difference in price has all but evaporated.
Bakken crude now fetches the same $91, or even a little more, per barrel as the West Texas crude was quoted at Wednesday, said oil industry sources.
As of August, there were 7,480 producing oil wells in North Dakota, up from 7,313 in July. Some have produced for decades, but most were developed in the past five years, state officials said.
Total production in August was 21.7 million barrels.
As of Wednesday, there were 187 rigs drilling new wells, down from the record of 218 set in May.
Part of the decrease in rig numbers is related to newer drilling rigs being more efficient, drilling faster and more wells from each location than older rigs, and overall slashing of costs by oil companies in light of slightly lower oil prices and rising costs, said Lynn Helms, director of the Department of Mineral Resources in a report.
The average well now can be drilled in about 20 days, with some wells completed in as few as 12 days, oil company officials have said. That's down from 30 days two or three years ago.