North Dakota’s Exponential Oil Production Growth Sets Another Record In October

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North Dakota’s Department of Mineral Resouces has released its report for October oil production, and not surprisingly the state has set yet another record for monthly output.

Mark Perry has the graph:

ndoil

Production in October was up 52.5% above a year ago, following increases of 57% in both September and August. In 17 months daily oil production in North Dakota has doubled from 364,000 bpd in May of 2011 to more than 747,000 in October 2012.

The number of active oil wells in North Dakota increased to 7,791 in October, which is a new state record. The wells are getting more efficient, too. The amount of oil produced per well increased to a record-high of 2,973 barrels, which was nearly 17% above where it was a year ago.

This is due to the new “pad drilling” techniques the industry has been deploying in the west (which also has less surface impact). Here’s an explanation of the process from Continental Resources.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • borborygmi

    I don’t get it. I was sure the oil production would stop by now since taxes haven’t been lowered or simplified. SARC

    • http://sayanythingblog.com Rob

      I don’t seem to remember anyone saying oil production in ND would stop if our too-high and too-complicated oil extraction tax structure wasn’t simplified.

      We simply pointed out, rightly, that oil production here would be more resilient to changing regulations and market conditions if the tax were simpler.

      But please, tell us how a complicated tax that’s pinned to oil prices is what’s best for North Dakota. I’d love to hear your explanation.

      • http://Sayanythingblog.com The Whistler

        The change will come about after the oil companies have the leases tied up.

        • borborygmi

          From what I understand most of the leases are tied up and they are onto the next phase. There has been talk about exploring outside the bakken but that seems to be wishful thinking of surrounding mineral rights owners.

          • http://Sayanythingblog.com The Whistler

            What I understand is that the leases are good for five years. However if they get a producing well (just one) that lease is good as long as the well is producing.

            So the leases are signed, but they are on a time limit. The oil companies are sinking a single well on a spacing and they’ll come back and fill up the spacing when they get time.

            Of course in some areas they’re probably ahead of that and already have the maximum number of needed wells on that spacing. The cool thing is that they can do all of these from one pad and reduce the amount of surface area they need.

            But once the spacings are locked up with a producing well they’ll be drilling where it is most profitable.

      • borborygmi

        Rob, Rob, Rob. You do read what you write don’t you. It was the chicken little approach a year or so ago. We all know that the real reason was to limit the amount of money in the State coffers.

        • http://sayanythingblog.com Rob

          No, I think what you’re doing is using a made-up version of my argument and attacking it as a straw man.

          Those of us in favor of fixing the tax pointed out that it would help should market or regulatory conditions turn against oil producers. That hasn’t happened, but that doesn’t really imply anything about the argument.

          But please, tell me how an extremely complex oil extraction tax benefits North Dakota? Especially when, should oil prices fall, the state stands to lose hundreds of millions in revenues?

          The lack of predictability isn’t just bad for the industry. It can make it hard for the state to project revenues as well.

        • jimmypop

          yup…port was all for it. after all, if we didnt lower it theyd just open up oil wells somewhere else… ha! and it wanst about making the tax easier to understand.

          it was nothing more than giving more money to crack dealers as the streets crumbled. when the street and all the needs are met for oil services in these small towns the tax should go to as close to zero as possible while providing dollars to maintain. until those needs are met, leave the tax as high as the moon.

          he never did answer how much he was getting paid by them.

          • http://sayanythingblog.com Rob

            I’m still for simplifying the extraction tax, I always was because I support lower, simpler taxes on principle.

            I’m still waiting for one of you geniuses to explain to me how North Dakota’s interests are served by such a complicated tax.

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