North Dakota oil production dips 2 percent
WILLISTON, N.D. - North Dakota oil production fell 2 percent in September as companies continue to slow down in response to low oil prices. The state produced an average of 1.16 million barrels a day, a drop of more than 25,000 barrels since Augu...
WILLISTON, N.D. – North Dakota oil production fell 2 percent in September as companies continue to slow down in response to low oil prices.
The state produced an average of 1.16 million barrels a day, a drop of more than 25,000 barrels since August, according to preliminary released Friday by the Department of Mineral Resources.
At the end of September, an estimated 1,091 wells had been drilled but were waiting on hydraulic fracturing crews, 98 more than at the end of August. That figure is expected to keep growing as companies wait for oil prices to recover before bringing new wells online.
Low oil prices will likely trigger a state tax incentive in December, but its impact to state revenues will be minor and the incentive will expire Dec. 31.
The tax incentive known as the large trigger goes into effect if the price of West Texas Intermediate oil at Cushing, Okla., remains below $55.09 for five consecutive months. The price averaged below that amount for July through October, and so far in November the average has been $45.09.
The impact of the large trigger on state tax revenues could have been significant, but legislators last session removed the incentive for new oil production from Bakken and Three Forks wells.
Tax Commissioner Ryan Rauschenberger said only a fraction of the state’s oil production will qualify for the incentive before it expires at the end of December.
On Jan. 1, the oil extraction tax will be reduced from 6 percent to 5.5 percent, for an overall taxation rate of 10.5 percent, under the changes adopted by the Legislature earlier this year.
North Dakota natural gas production dropped 2.6 percent in September to an average of 1.6 billion cubic feet per day.
Companies flared 19 percent of natural gas in September, down one percentage point from August.