North Dakota’s State Industrial Commission has released new production numbers for 2018, covering the months of January and February.
In January the state produced 36.6 MMbbls of oil, or 1.2 MMBOPD, and 64,226,435 Mcf, or 2,071,820 Mcf/day.
February was another good month of production for the state, reaching an all-time high for natural gas production. The commission reported natural gas production of 58,863,453 Mcf, or 2,102,266 Mcf/day.
As for oil, production decreased by around 4 MMbbls, down to 32.9 MMbbls, or 1.17 MMBOPD in February.
North Dakota had approximately 14,327 producing wells in February, which is four more than January. The all-time high was a few months ago, in December 2017. The number of rigs has incrementally increased – January saw 56 rigs in action, with 57 in February and 59 in March. As of April 13, 2018, the state had 60 rigs.
Commentary
- Crude oil take away capacity including rail deliveries to coastal refineries is more than adequate
- Oil price associated with competition with the Permian and Anadarko shale oil plays continue to limit drilling rig count
- Utilization rate for rigs capable of 20,000~ feet is 40-50%, and for shallow well rigs (7,000 feet or less) 25-30%
“Operators have shifted from running the minimum number of rigs to incremental increases and decreases as WTI oil price moves between $45 and $60/bbl. If WTI drops below $45/bbl for more than 30 days, rig count is expected to drop,” the report said. “WTI has remained above $55/bbl for more than 90 days, so rig count is expected to continue increasing. Current operator plans are to add 5-10 rigs in the second and third quarters of 2018, depending on workforce and infrastructure constraints.”
Weather has caused the number of well completions to become “highly variable.” In December 2017, 106 wells were completed, whereas in January 2018 about 57 wells were completed. February dropped down to approximately 51 completions – there were three days with wind speeds in excess of 35 mph (too high for completion work) and sixteen days with temperatures below -10 Fahrenheit.
