Pump jacks in northwestern Williston on Wednesday, the day the state announced production statistics for January.

North Dakota can’t stay away from its million barrel mark, even as the price of oil continues to hover around the bare minimum $50 companies have said they need to keep going. 

The world oil supply is slowly but surely coming into balance, but that is drawing OPEC countries to a meeting where they will decide if they should lift their production limits. Meanwhile, American exploration and production companies continue to promise increased production and, to the extent they make good on that promise, the additional supply will be a tempering force on the oil and gas recovery worldwide. 

Despite all the complexities, the number simply pleased Department of Mineral Resources Director Lynn Helms.

“It’s a pretty exciting number,” he said. “I don’t think anyone expected it to go up 53,000 barrels a day.”

Several factors played into the 5.4 percent bump in production statistics for February, which averaged 1.034 million barrels per day. There was good weather, and $50 oil keeping confidence high. Still frozen roads, on the other hand, allowed timely deployment of completion crews — although some companies did report moving heavy equipment into place in advance of frost law season.

Another factor, less predictable but no less powerful, has been the tenacity of the industry itself, Helms suggested.

“Some of the companies have surprised me,” he said. “One of our major oil and gas operators was initially talking about maybe running three or four rig programs. As the first of the year got here, they were running six rigs. Now they have 10 rigs running. Some of the companies, as oil prices have remained firm and opportunities have arisen and the capital has been there, have way exceeded their 2017 plans,” Helms said. 

Meanwhile, the company Helms referenced has also been finding great success with refracturing older wells, which may help drive new production as well, the director said. The North Dakota legislature is meanwhile considering a resolution calling for study of refracturing, which some believe may add billions of barrels to the overall projections for oil production.

The number of drilled but uncompleted wells fell to 799 in February, Helms said. It hasn’t been below 800 since December 2014. It hit a peak of 1,091 in September 2015.

Seventy-four new Bakken wells came online in February, and 93 conventional wells were returned to production. A drilling rig was added in February, seven were added in March and five had been added Thursday, Helms added, putting the state at 51. Every drilling rig adds an estimated 120 or so jobs.

Helms doesn’t expect the upward trend to continue. He’s predicting March numbers will be flat or fall a little bit. Road restrictions have since come into play, he pointed out, and that usually slows things down in the oil and gas industry, because the overweight trucks can’t be allowed on roads until they harden back up. 

Helms is predicting third or fourth quarter of 2017 for sustained production above a million barrels per day. North Dakota’s peak production was in December 2014 at 1.2 million barrels per day.

While a lot of the focus on a million barrels per day may seem psychological, it is more than that, the director added.

“When you look at being above a million barrels a day, that generates a lot of state revenue,” Helms said. “It drives a big part of the economy of North Dakota. “It’s a huge positive sign,” Helms said. “It means royalty owners will have money to spend. It means workers are coming back, and they love to spend money. The industry will be taking capital investments and the state will have revenue to put into infrastructure and social programs. So it isn’t just psychological. There is a difference between 900,000 and a million barrels per day in terms of revenue, capital investment and employees.”

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