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Who Would've Thunk it: North Dakota No. 2 Oil Producer

Continuing its basement-to-the-penthouse rise in the energy sector, North Dakota's latest oil/gas production statistics make the state that had no drilling rigs operating in 1999 now the second biggest oil producer in the nation, trailing only Texas.

Behind the advances in hydraulic fracturing (fracking) and the explosive growth it has unleased in the Bakken and Three Forks Shale formations, North Dakota passed Alaska to assume its new No. 2 position, pumping out 17.8 million barrels in March and averaging 575,490 bbl/d in March, according to the latest statistics released by Bruce Hicks, assistant state mineral resources director.

Hicks said Alaska produced 17.5 million barrels in March, and both states are still far behind Texas. Observers have emphasized that the importance of how far and fast North Dakota has come cannot be overstated for the oil/gas exploration and production (E&P) sector.

Ron Ness, the head of the North Dakota Petroleum Council representing several hundred E&P operators in the state, told local news media Tuesday that 13 years ago when there was no drilling in the state "people left this industry for dead." Ness attributed the rapid turnaround to a combination of "technology, geology, price and business climate."

Natural gas production totals in March were 19.2 Bcf, up from 17.4 Bcf for February. Oil production in February was 16.1 million bbl/d. The state has been setting new oil and gas production records almost every month (see Shale Daily, Jan. 12).

There were 6,921 producing wells in the state in March out of 7,699 capable of producing during the month, the North Dakota state statistics showed. This compared with 6,739 wells producing in February, meaning the producing wells increased by nearly 1,000 in March.

When it comes to drilling activity, the Bakken/Sanish/Three Forks play has seen the third largest increase in activity of any North American play over the last year, according to NGI's Shale Daily Unconventional Rig Count. For the week ending May 11, there were 219 rigs actively drilling for oil and gas in the play, up 25% from the 175 rigs that were operating one year ago.

Even with this rapid growth, North Dakota would have to nearly double its current production to pass Texas, which produced 32.9 million barrels (1.1 million bbl/d) in February, according to an Associated Press (AP) report Tuesday out of Bismarck, ND.

State officials and Ness expressed some bittersweetness about North Dakota climbing over Alaska, California and Louisiana from a national energy security perspective because each of the state's it passed are experiencing declining production. Alaska, for example, peaked in 1988 at 738.5 million barrels produced, but the state only expects to reach about 200 million barrels for total production this year.

Hicks was quoted by AP as saying the United States needs to get its production results rising nationally to begin to "wean ourselves from foreign oil."

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