North Dakota reports record drop in oil production
Friday, June 12, 2020

North Dakota's daily oil output fell 15% from March to April, the largest drop ever recorded from one month to the next. 

Figures released Friday show that oil production declined to an average of 1.22 million barrels per day in April, down 200,000 barrels per day from the previous month as oil companies idled wells and halted drilling plans as a result of oil prices collapsing during the coronavirus pandemic.

Official production data lags by several months, but State Mineral Resources Director Lynn Helms said Friday that he believes North Dakota's oil output hit rock bottom in mid-May below 1 million barrels per day.

"We think it's already turned a corner and on the way back up," he said at his monthly press briefing.

He estimated that production might already have rebounded as much as 100,000 barrels per day. 

West Texas Intermediate crude, the U.S. oil pricing benchmark, was trading for around $36 per barrel Friday, a substantial increase from earlier this spring when prices plunged as travel and oil usages halted during the pandemic.

Still, oil prices are not considered high enough to sustain much new drilling. Just 11 rigs were operating Friday, down from the mid-50s before prices collapsed.

Helms said some of the thousands of idled wells are actually still running, but just barely.

"Oil and gas engineers took a look at shutting in all these wells and figured out that in the Bakken formation, if you shut it down and leave it down for months, it's going to be very, very expensive to return it to production." he said. "So in many cases they're just pumping these wells an hour or two a day, maybe every other day."

Minimally running a well allows its mechanical system to stay in working condition, but it produces little to no oil.

Wells that have experienced a major drop in production are spread out across the oil play, said Justin Kringstad, director of the North Dakota Pipeline Authority.

"It's pretty universal," he said. "We're not seeing it concentrated, say, in the northern part of the field or the southern."

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