E&Ps pushed aside declining oil prices in December as Bakken operators pushed crude oil production to another record month.
But more recent indicators, such as rig count, indicate that even if prices continue to fall production could still be strong.
North Dakota produced 1.2 million barrels per day (MMbbl/d) of oil in December, a 3% increase from November. About 95% of production comes from the Bakken and Three Forks.
Producing wells increased to 12,124 from 11,951.
However, there are signs that a slowdown of sorts is beginning. In December, the rig count was at 181. In January it fell to 160 and as of Feb. 13 the count was 137, the lowest since July 2010.
In one snapshot in January, about 148 of 166 rigs were concentrated in Williams, Mountrail, McKenzie and Dunn counties.
Lynn Helms, director of the state’s Mineral Resources department, said that rig count in the Williston Basin has fallen rapidly. The utilization rate for rigs capable of drilling depths of 20,000 feet is about 70%. For shallow well rigs (7,000 feet or less), utilization is less than 50%.
Drilling permit activity also increased in December as operators positioned themselves for various 2015 budget scenarios, Helms said.
“North Dakota leasing activity is very low, consisting mostly of renewals and top leases in the Bakken/Three Forks area,” Helms said.
Nevertheless, Helms’ department estimates that even if oil prices fell to $25 per barrel, about 40 rigs would still operate and produce 1 MMbbl/d in 2015. Beyond $45, production would stay at or surpass 1.1 MMbbl/d.
December also set a high mark for natural gas production with 1.5 billion cubic feet per day, a 5% increase from November.
