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North Dakota Production to Slow Despite More Records, Official Says

Last November was another record-setting month for North Dakota oil and natural gas production, but a slowdown is coming as the winter months are tallied up, according to Lynn Helms, director of the state Department of Mineral Resources (DMR), which released its most recent monthly statistics on Tuesday.

North Dakota's robust production will pause its growth in the coming months. And flaring of associated gas is expected by Helms to increase sharply, perhaps reaching the record levels of 2011.

For November, the most recent month with final statistics, oil and gas production was slightly lower than it had been in October, but daily production was up in both cases to all-time record levels. Oil production hit 29.1 million bbl, or 973,045 b/d, compared to 29.3 million bbl, or 945,182 b/d, in October; gas was 32.5 Bcf, or 1.086 Bcf/d, compared to 33.2 Bcf, or 1.072 Bcf/d, in October.

The lag in the overall production totals month-over-month is attributable to November having one less day than October, according to DMR.

Helms said the daily oil production was about a 28,000 b/d increase in November, but "December isn't going to be so nice." He said operators have reported that "hydraulic fracturing was an enormous problem in the month of December" because of big problems in trucking around fracking water.

"Most of the companies had switched to using a lot of surface water due to the summer and fall months' wet conditions, but when the cold weather came and that was no longer available, there was a shortage of trucks available to transport frack water compared to past years."

Helms said December could end up being a wash or even a decline compared to November, mainly because of adverse weather.

The state rig count increased for the most recent month, with December hitting 190, but in the state's five largest producing counties rig counts are all lower than their all-time high levels in the past three years by 8% to 38%, and four of the five are down by 18% or more.

Helms said his state continues to be concerned about the takeaway capacity for crude oil, particularly in lieu of the ongoing investigation of the Casselton, ND, crude rail car derailment (see Shale Daily, Dec. 31, 2013) and the federal investigation of the composition of Bakken light sweet crude. DMR has a lot of data collected on the local crude, which it will make available to federal Transportation Department investigators if they want it, he said.

Flaring increased to 30% again in November mostly because of the shutdown of the Tioga gas processing plant, which is expected to be offline, switching from a 60-year-old facility to a new one in February, said Helms, predicting that in the next two months "we're going to see some pretty tough flaring numbers."

In response to a question for more specificity, Helms said he could not be more precise, but the flaring percentages could equal the past record of 36% set in September 2011. This will temporarily set back the state's aggressive moves to curb flaring (see Shale Daily, Sept. 18, 2013).

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