North Dakota surpasses oil production record

BISMARCK, N.D. — North Dakota oil drillers have outdone last year’s record crude production and are nearing a milestone of a half-million barrels of oil a day, according to an Associated Press analysis confirmed by state and industry officials.

The AP count based on current drilling activity and production estimates found the state already has surpassed the 113 million barrels produced through all of 2010.

Ron Ness, president of the North Dakota Petroleum Council, confirmed the numbers on Wednesday and said the state should end the year with about 150 million barrels of oil.

“Those are significant numbers for home-grown domestic crude,” said Ness, whose group represents about 250 companies working in the state’s oil patch.

Record drilling, strong crude prices and favorable fall weather have pushed production in the state’s oil patch, said Lynn Helms, director of the North Dakota Department of Mineral Resources.

The state Industrial Commission said crude production in September totaled 464,122 barrels a day, or nearly 123,000 more barrels than September 2010. The state Industrial Commission said crude production through September totaled about 105.8 million barrels.

September statistics are the latest available because oil production numbers typically lag at least two months, but current drilling activity indicates the state likely surpassed last year’s record sometime in October, Ness said.

North Dakota sweet crude prices have been nudging $100 a barrel this week, up about $25 a barrel from last year.

Helms said the state would surely hit the half-million daily barrel mark by year’s end.

“We should be about there,” said Helms, the state’s top oil regulator. He earlier had predicted the state to reach 475,000 barrels by the end of 2011.

A record 204 rigs were drilling in western North Dakota in the past week, nearly all aiming for the rich Bakken and Three Forks formations. Helms expects about a dozen more rigs working by the end of the year.

The state had a record 6,071 producing oil wells in September, up 120 from August, and nearly 1,000 more than a year ago.

“It looks like we will continue drilling wells at a record pace,” Helms said.

Still, oil production has been slowed by the lack of crews to perform hydraulic fracturing, a process that uses pressurized fluid and sand to break open oil-bearing rock 2 miles underground. Helms said an additional 10 so-called frack crews are slated to be working in western North Dakota by next spring, bringing the number to 45.

The ability to move crude to market is keeping pace with North Dakota’s oil production, said Justin Kringstad, director of the North Dakota Pipeline Authority.

The so-called daily takeaway capacity for North Dakota and eastern Montana at present is about 773,000 barrels, including 438,000 by pipe and 335,000 by rail, he said.