North Dakota posted its fourth highest monthly production increase in May with output rising by 36,379 barrels per day over April to a new record high 1,039,635 bpd, an increase of 3.6 percent. However, the increase was expected to be greater, and were it not for adverse weather, it likely would have been.
And not only did weather hamper production, but the backlog of wells waiting on completion actually increased in May due to adverse weather conditions.
“If you recall, May was still a bit nasty, a bit cool and windy in terms of weather,” Department of Mineral Resources Director Lynn Helms said during a monthly press conference in Bismarck on July 14.
Helms cited several examples of the weather that affected operations in May, one being a significant rain event in the Dickinson area in late May. “We had one area that’s in the Bakken and Three Forks that got nearly three inches of rain and a dry day in between then almost two inches the next day,” which he said hampered oil field operations in the Dickinson area for about three days.
In addition, Helms said, high winds hampered well completions in both the Dickinson and the Minot areas in May with five to six days of high winds that prevented completion crews from working. “We’re still a very windy state,” Helms said. “We didn’t used to have to pay attention to that,” but added that the elevated masts situated above wells during hydraulic fracturing operations can be significantly affected by high winds.
The end result was an increase in the backlog of wells awaiting completion. “We ended the month of May with more wells waiting on completion than we started with - 10 more wells. And we thought we would reduce that inventory - we ended with 610 wells waiting on a completion.”
However, Helms is optimistic that with better weather in the summer months the state will see a rise in the number of completions and larger production increases. “So again, (I’m) still expecting really the big, significant surge in June, July and August in terms of completions and some pretty rapid production increases.”
The largest monthly increase in North Dakota oil production occurred in July 2013 when daily production went up by 50,758 bpd, which was an increase of 6.2 percent over June 2013 output. The second and third largest increases occurred in February and August, 2013 (see chart). However, in terms of percent increases, North Dakota saw production rise by more than 10 percent in February 2010 and again in July 2011. In terms of absolute numbers, those two monthly increases corresponded to 24,958 and 39,501 bpd, respectively.
Preparing for winter
While North Dakota waits to see a summer production surge, operators have stepped up the permitting pace in anticipation of the not-too-distant winter.
“Permitting is already up significantly, and that is because oil companies – operators – have already begun to focus on next winter,” Helms said, adding that with the gas capture policies adopted by the North Dakota Industrial Commission, operators are becoming more focused on the long-term.
“So they’re not only permitting wells that have to get drilled this summer ... but they’re already looking at the construction season knowing that somewhere between Halloween and Thanksgiving all well pads need to be constructed.”
Rig count
The drill rig count in the state has held steady at about 190 with 189 operating rigs at the end of May, 190 at the end of June and 191 as of July 14. However, Helms said one “major” operator was recently in the office meeting with staff and said it would like to add “half a dozen” rigs to its fleet by the end of the year. “We are still anticipating an increased rig count in the third and fourth quarters of this year,” Helms said.The May numbers
Preliminary numbers released on July 14 put North Dakota’s total May production at 32,228,691 barrels for average daily production of 1,039,635 barrels. That is a gross increase of 2,131,004 barrels over total production in April.
The state produced a total of 36.94 billion cubic feet, bcf, of natural gas in May for a daily average of 1.191 bcf. That is a gross monthly increase of 2.88 bcf over April, and a daily increase of approximately 56 million cubic feet or 5 percent.
North Dakota had a total of 10,892 producing wells at the end of May, an increase of 227 over April. Of those producing wells at the end of May, 69 percent were producing from the Bakken and Three Forks formations. Of the 1,039,635 bpd production in May, 94 percent came from Bakken and Three Forks wells with the remaining 6 percent from “legacy conventional” pools.
In May, 234 drilling permits were issued, up just one permit from the 233 issued in April. However, in June, 247 drilling permits were issued. The Bakken and Three Forks formations are the targets for over 95 percent of the drilling in North Dakota.
