North Dakota output rose nearly 7% in December, State says as rigs drop

BISMARK, North Dakota -- North Dakota’s oil production rose by nearly 2.4 MMbbl in December, but the state’s rig count has now fallen to its lowest level in nearly five years.

According to preliminary figures from the North Dakota Industrial Commission, the state produced 38,047,667 bbl of oil—or 1,227,344 bopd—in December.

The figure represents an increase of about 2.4 MMbbl, or 6.7%, from the 35,647,735 bbl—or 1,188,258 bopd—produced in November.   

The Commission also reported Friday that the state’s rig count is feeling the impact of depressed oil prices.  

The rig count currently stands at 137—the lowest level since July 2010—and is down 37% from the all-time high of 218 on May 29, 2012.

According to the Commission, North Dakota dropped seven rigs from November to December, an additional 21 from December to January and then a further 23 from January to the report’s issuance on Friday.  

The State identified the downdraft in oil prices as by “far the biggest driver behind the slow-down” in activity.

Operators are postponing “completion work to avoid high initial oil production at very low prices and to achieve NDIC gas capture goals,” the State added.

Oil is currently trading at a heavy discount from its value last June. WTI—the U.S. benchmark crude—closed at $51.21/bbl on Thursday.

Ninety five percent of North Dakota’s oil production is accounted for by the Bakken and Three Forks. The remaining 5% comes from legacy pools.