Bitter cold, high winds and heavy snows have been gripping much of the country -- and the economy -- and the same is true in the North Dakota oil patch. Drilling and production statistics for December show that even heavy industrial activities like drilling and well completion have their limits when it comes to extreme weather.
Oil production was off 5.5%, or about 53,000 b/d, from November to December and production of natural gas was down by 9%, while the rig count, permitting and oil prices were all on the rise, said Lynn Helms, director of the state's Department of Mineral Resources, during a conference call Friday.
The production decline zapped a string of increases that has run since January 2012, he said. "We had about a dozen straight records and increases in production and now a decrease," Helms said. "A month or two ago we had started talking about December was going to be a problem based on what we were seeing develop in terms of the weather."
The weather was the big story in December, he said, and it sure took a bite out of well completions, dropping their number for the month to 119 from 138 during the previous month. Days from spud to initial production increased by 18 to 132, he said. December saw the lowest number of wells spud, 154, since February 2012.
And slowing well completion activity drove the number of wells awaiting hydraulic fracturing to a new record: 635, which is 125 more than a month ago, Helms said. "We just have this big, big overhang waiting for hydraulic fracturing. That catch-up may not really come until spring thaw...We may not get caught up on that until May when road restrictions are likely to come off."
As the industry does catch up, though, there will "absolutely" be a slug of increased production, he said.
The December rig count was 190, up from 184 in November, but it then dropped to 188 last month, according to the numbers kept by Helms.
"Really, the big story in December was the weather," Helms said. "We had a significant number of days where we saw 21-31 degrees below zero Fahrenheit. We had four big snow events across the northern central part of the state. We had five big wind events occur over and over again, just one Alberta clipper after another. Obviously, cold weather really impacts hydraulic fracturing."
Most operators use freshwater for fracking, Helms said, but in temperatures as low as what North Dakota has seen, even saltwater freezes. "They just simply can't pump hydraulic fracturing jobs when you have 21 and 31 degrees below zero, so that's a major impact from the cold. The snow events stopped them from moving material." And high winds kept operators from erecting workover rigs at the pace they would in less blustery days.
Natural gas flaring was up to record levels (36% of produced gas) again as the Hess Corp.-owned Tioga Gas Plant was temporarily shut down in late November. It was expected to be back online by now, but that might not come until the end of the month, Helms said. The increase in flaring would have been worse had it not been for new gathering system capacity that went online during the period, he said.
Crude oil takeaway capacity is expected remain adequate as long as rail deliveries to coastal refineries keep growing, according to Helms.