In a positive sign for the industry, the break-even price for oil production at existing wells, statewide, has slipped to $26 per barrel, Helms said.
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The price of North Dakota sweet crude is now at $32.25, down from $35.57 in July and $38.75 in June, according to data from Flint Hills Resources, owner of a major refinery in Rosemount. “We’re seeing some pretty significant shut-in production”.
June crude production represents a drop of 2% from May’s 1.047 million b/d and the lowest volume seen since April 2014.
That price is causing production to take an expected fall.
Noting that natural gas production has been up “significantly” since the state imposed its gas capture plans two years ago (see Shale Daily, July 3, 2014), Helms said that in the very active part of the Bakken, where the core economics are still robust, everything is very gassy.
The drill rig count in North Dakota stands at 34, up by three from July but well below the peak of 218 in May 2012.
North Dakota is “30-40 completions shy” of the number needed to maintain production, he said, adding that 70-80 completions a month are required to maintain production and 80-plus/month to grow production.
An underlying good news story is that rig counts were up by seven and breakeven prices in the Bakken’s major producing counties were down by an average of $5/bbl. “Lot of natural gas produced with the oil”, Helms said.
Oil production is continuing the downward trend, dropping about 20,000 barrels per day for the month.
“It’s a bit of a surprise that they have the lowest. breakeven costs”, he said.
On the other hand, production of natural gas is on the rise.
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Production of crude in the state declined to 1.03 million barrels a day in June from 1.05 million barrels a day in May, according to the latest data from the North Dakota Department of Mineral Resources.
