UPDATED: ND Oil Production Fell 9 Percent In December

WILLISTON, N.D. — Severe winter weather caused North Dakota oil production to drop 9 percent in December, the largest monthly decline in state history, the Department of Mineral Resources said Wednesday, Feb. 15.

The state produced an average of 942,455 barrels of oil in December, down more than 92,000 barrels per day since November, according to preliminary figures.

“This is the largest drop we’ve ever had,” Director Lynn Helms said.

He attributes the decrease to the three significant snowstorms North Dakota had in December, which prompted companies to shut down some low-producing wells until spring rather than pay for ongoing snow removal.

In addition, 15 days in December had winds over 35 miles per hour and nine days had temperatures below negative 10 degrees, conditions that make hydraulic fracturing and other operations difficult.

January production figures are projected to be steady, Helms said.

“This production loss is going to linger into the second quarter of the year,” Helms said. “We won’t see it turn around for quite some time.”

Natural gas production fell 12.6 percent in December to an average of 1.5 billion cubic feet per day.

Winter weather also prompted natural gas flaring to increase from 11 percent in November to 14 percent in December due to problems such as frozen lines, Helms said.

Companies are recruiting workers to put more fracking crews to work in North Dakota this year, but the activity likely won’t ramp up until the middle of the year. Spring road restrictions that will be in place this spring due to soft road conditions will restrict heavy truck traffic required for fracking crews.

“There’s going to be a lot of truck traffic starting in May and running probably through October, November of this year,” Helms said.

Rail transportation of North Dakota crude oil fell below 250,000 barrels per day in December, the lowest level since the first half of 2012, according to figures from the North Dakota Pipeline Authority.

Director Justin Kringstad said 64 percent of oil was transported by pipeline in December and 22 percent was transported by rail.

With Dakota Access Pipeline under construction again, the completion of that project will likely have a significant impact on companies’ decisions to drill and frack new wells due to savings in transportation costs, Helms said.

The last time North Dakota oil production saw a significant monthly drop was from March to April of 2016, when production dropped about 70,000 barrels per day, the department said.

The number of wells that have been drilled but are waiting on hydraulic fracturing crews was estimated to be 807 at the end of December, a decrease of 32 from the previous month.

The number of inactive wells was estimated to be 1,573 in December, an increase of 54.

Thirty-eight drilling rigs were operating in North Dakota on Wednesday, down from 41 a year ago and 137 two years ago at this time.

Operators are expected to add a few more rigs in 2017, as long as oil prices remain between $50 and $60 a barrel for West Texas Intermediate, Helms said.

Severe snowstorms in December 2016 made accessing oil wells like this one near Williston, N.D., difficult. Photo courtesy of Department of Mineral Resources