Department of Mineral Resources Directors Cut (January)

*Department of Mineral Resources Directors Cut

Oil Production

October 36,698,095 barrels = 1,183,810 barrels/day (final)

November 35,847,594 barrels = 1,194,920 barrels/day (preliminary)

(all-time high was Dec 2014 at 1,227,483 barrels/day)

1,140,032 barrels per day or 95% from Bakken and Three Forks

54,561 barrels per day or 5% from legacy conventional pools

Gas Production

October 64,027,664 MCF = 2,065,409 MCF/day

November 62,860,261 MCF = 2,095,342 MCF/day (NEW all-time high)

Producing Wells

October 14,253

November 14,324 (preliminary)(NEW all-time high)

12,269 wells or 86% are now unconventional Bakken – Three forks wells

2,055 wells or 14% produce from legacy conventional pools


October 147 drilling and 2 seismic

November 119 drilling and 0 seismic

December 86 drilling and 2 seismic (all time high was 370 in 10/2012)

ND Sweet Crude Price1

October $43.56/barrel

November $49.75/barrel

December $49.56/barrel

Today $54.75/barrel (all-time high was $136.29 7/3/2008)

Rig Count

October 56

November 54

December 52

Today’s rig count is 56 (all-time high was 218 on 5/29/2012)

The statewide rig count is down 74% from the high and in the five most active counties rig count is down as follows:

Divide -100% (high was 3/2013)

Dunn -82% (high was 6/2012)

McKenzie -64% (high was 1/2014)

Mountrail -83% (high was 6/2011)

Williams -73% (high was 10/2014)

Directors Comments:

The drilling rig count was down two from October to November, decreased another two

from November to December, and is currently up four from December to today. Operators have shifted from running the minimum number of rigs to incremental increases and decreases as WTI oil price moves between $45 and $60/barrel. If WTI drops below $45/barrel for more than 30 days rig count is expected to drop. If WTI remains above $55/barrel for more than 90 days rig count is expected to rise. Current operator plans are to add 5-10 rigs in the second and third quarters of 2018 depending on workforce and infrastructure constraints.

The number of well completions has become highly variable from 81(final) in October to 60 (preliminary) in November. Oil price downside risk is now anticipated to last through 2018. OPEC met the last week of December and decided to extend production cuts to year end 2018. Crude oil futures markets appear to anticipate OPEC production cuts maintaining prices through June 2018 with US shale production resulting is slight overproduction mid-2018 through mid-2019. US crude oil inventories continue to trend downward toward the long term average.

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