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Oil pumping units are pictured in Mountrail County, N.D., in June 2016. Forum News Service file photo.

ND oil production moves into growth mode

BISMARCK — North Dakota oil production is back in growth mode, up about 1 percent in November to 1.19 million barrels per day, the Department of Mineral Resources reported Tuesday, Jan. 16.

Director Lynn Helms said he expects the state will set a new oil production record in the first half of 2018, exceeding the high of 1.23 million barrels per day set in December 2014.

Helms cautioned, however, that extreme cold temperatures have recently caused some electrical problems in northwest North Dakota that could decrease January's production levels.

"Any given month, we could take a step backward, but we are definitely back in growth mode at these oil prices," Helms said.

The price of North Dakota sweet crude was $54.75 a barrel on Tuesday, compared with $49.56 a barrel in December, according to figures Helms cited from Flint Hills Resources.

When prices were low, operators primarily focused on the core area of the Bakken where wells are most profitable.

Now areas that had been considered to be on the fringe of the Bakken are expected to be more attractive to drillers, thanks to recent increases in oil prices and advancements in technology, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Helms said he expects areas in Divide, Burke and northern Williams counties will start to see additional drilling rigs this year. Divide County has had zero rigs operating and Burke County has one.

Overall, the state had 57 rigs operating on Tuesday, and Helms said he expects that to grow by five or 10 later this year.

Natural gas production increased 1.4 percent in November to nearly 2.1 billion cubic feet per day, according to preliminary figures.

The industry flared less natural gas in November, with 14 percent flared statewide compared with 17 percent flared in October. The volume of gas flared in November was 282 million cubic feet per day, Helms said.

The state had a total of 14,324 producing oil and gas wells in November, another record for the state.

One figure Helms said he's frustrated by is the number of inactive wells, which increased by 21 in November to 1,492. Even as oil prices have improved, companies haven't brought those wells back online, instead spending money on new wells, Helms said.

Regulators are discussing new policies that could be adopted to decrease that number, he said.

The state also had 883 wells that were drilled but waiting on hydraulic fracturing crews at the end of November.

About 75 percent of oil was transported by pipeline in November and 11 percent was transported by rail, Kringstad said.