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Bakken Oil, Gas Output in North Dakota Seen on Decline in Early 2019

Oil and natural gas production volumes in North Dakota’s portion of the Bakken Shale slumped late last year amid signs of self-imposed reductions attributed in part to winter weather, with output likely to remain pressured through the first half of the year.

State Department of Mineral Resources Director Lynn Helms on Tuesday called the decline in November, the most recent months for statistics, marginal. However, the upward trend in the rig count and oil prices were promising, with North Dakota light sweet crude trading at $36.75/bbl on Tuesday.

Natural gas production in November declined month/month to 75.6 Bcf (2.52 Bcf/d) from 79.4 Bcf (2.56 Bcf/d). Oil production fell 1.2% from October to 41.2 million bbl (1.37 million b/d). Helms said the industry had a self-imposed reduction estimated at 99,000 b/d in November that may be attributed to a state review of gas capture goals.

Declining production is likely through the first half of this year, he said.

"At current rig counts, we're likely to continue to see declining production in June, but expect we will maintain a level of 1.2 million b/d.” In the second half of 2019, "big peaks" in production are expected.

After dropping by more than half from October through December, from $58.43/bbl to $26.25, North Dakota crude prices have climbed in the new year, Helms noted. The state’s rig count also hit a “solid” 68 as of Tuesday.

"Operators have shifted from running the minimum number of rigs to incremental increases and decreases based on gas capture, completion crew availability and oil prices," he said. "Current operator plans are to add one to five rigs in 2019, depending on workforce and infrastructure constraints."

The monthly report noted that 99% of the drilling now occurs in the Bakken/Three Forks formations. Wells waiting on completion were slightly less than 1,000, with inactive wells in November increasing by 18 to 1,381.

 

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