NEW YORK, Feb 13 (Reuters) - North Dakota's shale oil production appears to have reached a plateau after a renewed rise at the end of last year, the state's top oil official said on Friday, a sign that the U.S. oil boom might be slowing sooner than expected.
Oil production in the No. 2 producing state rose nearly 40,000 barrels per day to 1.23 million bpd in December, resuming its years-long rise after three flat months, monthly data from the state's Industrial Commission showed on Friday.
Many forecasters, including the U.S. government, expect overall U.S. production to continue rising until the middle of this year, despite a sharp fall in drilling rigs, as increased efficiency and a focus on sweet spots maintains the shale boom that has raised U.S. output by nearly 70 percent in the last five years.
Lynn Helms, the state's head of Department of Mineral Resources (DMR), said the December figures were "encouraging," but warned they may not be bettered anytime soon. The number of rigs drilling for oil in North Dakota could shortly dip below 130, the level Helms previously estimated was necessary to maintain output at around 1.2 million bpd.
"It all depends on oil price and rig count," Helms said during a conference call. "Oil prices are beginning to recover, but the rig count is still down. In the short term, we'll maintain production at a little over 1.2 million barrels per day."
Helms added that "significant" growth could occur next year.
Global oil benchmark Brent crude prices touched above $60 a barrel for the first time this year on Friday, but are still some 45 percent lower than in the summer.
He added that rig count is still down and should fall further, underscoring the muted growth in the home of the majority of the Bakken oil fields.
The drilling rig count in North Dakota dropped by 7 from November to December, and another 21 between December and January. It has since fallen by 23 since January, the DMR said.
On Friday, there were 137 rigs in the state, the fewest since July 2010.
"There's talk of another 15 rigs that could be idled, taking us down to the low 120s," Helms added.
Meanwhile, well completions increased to 173 in December from 48 in November. Producing wells in the state reached a new record of 12,124 in December versus 11,951 in November.
The state's oil wells flared 24 percent of produced natural gas. Production cuts are imposed if more than 26 percent of produced natural gas is flared. The January capture target is 23 percent.
About 750 drilled wells in North Dakota were waiting to be hydraulically fractured, or "fracked," at the end of December, down 25 from 775 in November, according to state data.
(Reporting By Catherine Ngai; Editing by Jonathan Leff, Nick Zieminski, Meredith Mazzilli and Andre Grenon)
Copyright 2016 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles