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(Reuters) – North Dakota crude oil production is expected to have climbed in August and maintain momentum in the following months as sustained drilling activity and robust crude prices support output across the state, the state Department of Mineral Resources said on Monday.
Output in the United States’ third-largest oil-producing state rose marginally by 1,846 barrels per day to reach an average of 1.157 million bpd in July, according to the latest available production data released by the regulator.
“Given activity levels and pricing, I suspect August will be a stronger month versus July,” Justin Kringstad, executive director of North Dakota’s Pipeline Authority, told reporters during a monthly press briefing.
The state’s active rig count stood at 34 in September, unchanged from August, according to Department of Mineral Resources data. North Dakota also recorded nine active hydraulic fracturing crews and a record 20,072 producing wells in July.
Gunther Harms, a treating plant manager at the Department of Mineral Resources, said rig additions have leveled off following a late-summer increase, with operators that planned expansion programs for the second half of the year largely having deployed their equipment.
Most newly deployed rigs were reactivated from idle status within North Dakota or moved into the state from neighboring Montana, Harms said.
State regulators also noted strong activity among workover rigs, mobile units used for well maintenance and remediation, across western North Dakota. The elevated level of servicing activity suggests additional wells could be brought online in the coming months.
“Operators are moving on these wells quicker and trying to get them on production as well,” Harms said.
US crude futures for March delivery, a benchmark often watched by producers because it roughly aligns with the time required to drill and complete a new well, were trading near $82 a barrel, compared with front-month prices of $95.78 a barrel.
While producers continue to expect oil prices to remain relatively strong, Kringstad said forecasting crude prices remains difficult. From a state budgeting perspective, North Dakota has left its production forecast unchanged despite July output exceeding the state’s forecast of 1.1 million bpd, he said.
Reporting by Siddharth Cavale in New York; Editing by Nia Williams
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