Ending a year's worth of record-breaking production numbers, North Dakota's Bakken Shale was forced to slow down in the midst of bitter cold weather in February as oil volumes month/month fell by 5% and natural gas volumes dropped by 3%, according to the latest statistics released last Friday.

With the bottom falling out of everything except oil prices, North Dakota reported February oil production at 37.3 million bbl (1.33 million b/d), compared to 43.5 million bbl (1.4 million b/d) in January. Gas volumes were 73.5 Bcf  (2.6 Bcf/d), compared to 84.3 Bcf (2.7 Bcf/d) in January.

"It was a pretty significant drop, and a major drop in terms of the number of conventional wells shutting down," said Department of Mineral Resources Director Lynn Helms. The oil decrease was 69,000 b/d, and gas production declined by about 100 MMcf/d. "Once again, gas dropped less than oil...

"There was actually an increase in Bakken wells producing, but the conventional, vertical wells had more than 400 wells go idle, and we saw the idle well count for the month really skyrocket, so we intend to keep an eye on that," Helms said.

"Completions also were down significantly,” at 59 in February, compared to 92 in January and 113 in December.

Producing wells in February dropped to 15,090 from 15,409 in January, which was an all-time high for the Bakken. The number of wells awaiting completion has grown to more than 900, and the inactive wells (1,667) jumped up 10%.

"You expect this with the severe weather we had," Helms said. "It is very difficult to move and heat frack water in severe cold conditions."

Oil prices reached $52.50/bbl on Friday for Bakken light sweet crude, compared to $48/bbl in March and $46.30/bbl in February. Natural gas prices, however, have not kept pace, dragging even farther behind.

"Gas prices have not kept up, even though the volumes of gas in storage are significantly below the five-year averages," Helms said. "We're at the point where the value of a bbl of crude oil is about 23 times that of gas, and on a BTU basis it should be six-to-one, so at this point gas is incredibly cheap."

In this context, operators in the state continue to struggle in meeting mandated gas capture goals, mostly because of the relatively low capture percentages on the Fort Berthold Reservation where more than a quarter of the Bakken production is developed.

The lack of capture success is reflected in the February decrease in production. About 52,000 b/d of production was forced offline due to operators having to restrict production because they failed to meet their capture goals.

"It is probably going to be an issue throughout this year," Helms said.