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N.D. oil production up slightly in April

BISMARCK - After seeing its largest monthly drop ever in April, North Dakota oil production rebounded slightly in May but is still expected to dip below 1 million barrels per day by the end of this year or early next year, Department of Mineral R...

Oil pumping units are pictured in Mountrail County, N.D., on Wednesday, June 29, 2016. Amy Dalrymple/Forum News Service
Oil pumping units are pictured in Mountrail County, N.D., on Wednesday, June 29, 2016. Amy Dalrymple/Forum News Service

BISMARCK – After seeing its largest monthly drop ever in April, North Dakota oil production rebounded slightly in May but is still expected to dip below 1 million barrels per day by the end of this year or early next year, Department of Mineral Resources Director Lynn Helms said Friday.

Production inched up by half a percentage point in May, to 1.047 million barrels per day, or 5,383 barrels per day higher than in April, according to preliminary figures.

Helms said the increase shows the resistance of North Dakota’s enormous oil industry to lower numbers of drilling rigs and well completions.

“There’s so much inertia when you’re at or around 1 million barrels a day that production typically doesn’t drop real rapidly,” he said.

April production was down more than 6 percent, or 70,400 barrels per day, which Helms blamed in part on sustained low oil prices, spring road restrictions and 15 days that were too windy to complete wells. If April hadn’t seen such an abnormally large drop, May likely would have seen a decrease, too.

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“It would appear based on completion numbers, rig count, oil prices, that we’ve hit bottom and we’re kind of bouncing along the bottom,” he said. “But as we see better oil prices and we see completions and even when we start to see some rigs coming back, there’s going to be resistance to production increases, as well.”

The state averaged 27 drilling rigs in May and had 29 rigs operating on Friday, matching the April average. The rig count was 73 a year ago and hit all-time high of 218 in May 2012.

Helms noted oil prices have been stuck below $50 a barrel – the price needed before North Dakota sees significant work on fracking uncompleted wells – as Britain’s vote to exit the European Union has rippled through the world economy and supplies remain high. Only 37 wells were completed in May, less than half the number needed to sustain or grow production, Helms said.

“It points to a gradual decline in production,” he said, noting the uncompleted well count increased by 39 to 931 in May.

The number of inactive wells dropped by six to 1,584, and Helms said the recent addition of what appears to be 100 or more workover rigs has helped stabilize production and will provide a boost to the western North Dakota economy through more jobs and sales tax revenue.

Flaring of natural gas also increased from 9.2 percent in April to 11.5 percent in May, which Helms attributed partly to an increase in gas production without additional gathering and processing capacity to handle it.

North Dakota Pipeline Authority Director Justin Kringstad said transportation of crude oil from the Williston Basin remained below 400,000 barrels per day for the second straight month, a level not seen since August 2012.

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