January oil production ‘somewhat disappointing’ as weather delays progress

WILLISTON, N.D. – Windy January weather contributed to a less than 1 percent increase in North Dakota oil production, likely delaying the much-anticipated 1 million barrel a day milestone until spring.

North Dakota produced an average of 933,128 barrels of oil per day in January, according to preliminary numbers released Thursday by the Department of Mineral Resources.

The figure is an increase of 6,441 barrels per day over December production, but down more than 43,000 barrels a day compared with the state’s record November oil production.

“I could characterize it as somewhat disappointing,” Director Lynn Helms said of the January production.

While January weather was warmer and drier than December, the month had 12 days with sustained wind speeds high enough to prevent some crews from working to complete wells, Helms said.

In addition, operators shut in more than 100 oil wells in the Tioga area in an attempt to minimize natural gas flaring while the Hess Corp. gas plant continues to be offline, Helms said. The plant has been down since late November as it transitions to an expanded plant, which has taken longer than expected.

Natural gas flaring was at 36 percent in January, holding steady with December and tying the historic high North Dakota hit in September 2011. Helms said Hess has successfully tested the new plant and expects to have it up and running at the end of March, which should significantly reduce the flaring percentage.

“I really expect that we’ll see a stair-step drop in the April flaring numbers,” Helms said.

North Dakota produced an average of 1 billion cubic feet of natural gas per day in January, according to the preliminary figures.

February oil production figures are again expected to be affected by winter weather, Helms said.

While March has had warm temperatures so far, spring road restrictions will make hydraulic fracturing operations difficult, he said. Stark County has weight restrictions in place and the limits take effect today for McKenzie and Williams counties, where much of oil activity is concentrated.

Helms said he anticipated North Dakota would hit the 1 million barrel per day milestone the first quarter of 2014, but he now predicts that to occur in April.

Seventy-two percent of North Dakota oil production was transported by rail in January, down one percentage point from December, said Justin Kringstad, director of the North Dakota Pipeline Authority.