North Dakota rolled into this winter's freeze on a high for both production and prices, but state officials said Tuesday oil price downside risks are expected to last through the year, after the Organization of the Petroleum Exporting Countries extended production cuts.
Department of Mineral Resources Director Lynn Helms on Tuesday reported a crude oil price of $54.75/bbl for Bakken Shale sweet crude following average prices that were just below the $50/bbl mark in November and December. Prices shot up by $6/bbl from October to November, he said.
Oil and natural gas production in November, the most recent month with complete statistics, showed an increase in the average daily volumes, although overall totals were down slightly because of the extra day in October.
November production reached 35.8 million bbl (1.19 million b/d) from 36.6 million bbl in October, or 1.18 million b/d. Natural gas production fell to 62.8 Bcf (2.09 Bcf/d) in November from 64.02 Bcf (2.06 Bcf/d) in October.
As of Tuesday, Helms said the state rig count had climbed to its October level of 56, following slight declines in November (54) and December (52). The statewide rig count is still down 74% from an all-time high of 218 in 2012.
"Current operator plans are to add five to 10 rigs in the 2Q2018 and 3Q2018, depending on workforce and infrastructure constraints," Helms said. He said a yardstick for increasing rig counts is if oil prices remain above the $55/bbl level for at least 90 days.
Gas flaring statistics continue to be a mixed bag. In November, producers captured 86% of their natural gas from all formations, and 87% of gas produced in the Bakken was captured. When statistics from the Fort Berthold Reservation are not included, the total was 90%. The capture rate on the Native American reservation was 75%.