North Dakota’s oil producers boosted output in October to sell as much as possible ahead of last week’s OPEC meeting, bucking a trend for contraction amidst plunging crude prices.
The 13-member bloc of global oil producers had long been expected to keep or raise its unified output cap at its semiannual meeting. Because output wasn’t trimmed and members were effectively allowed to pump at will, oil prices have sunk further since the meeting, adding to losses of more than 50 percent in the past year.
“A lot of (North Dakota) operators were pretty pessimistic about the OPEC meeting, and they looked at October and November to sell oil at what may have been the high price for the next six months,” Lynn Helms, head of the state’s Department of Mineral Resources, said on a Wednesday conference call with reporters.
The move now appears prescient, as OPEC’s meeting ended last week without a reference to its output ceiling.
North Dakota producers also were able to raise output, in part, because of new natural gas collection equipment coming online from Oneok Inc and others. About 86 percent of produced natural gas was collected and processed during October, 5 percentage points higher than the previous month and far above state-required minimums.
Roughly 260 wells had failed to meet the minimum during September and had been temporarily shuttered by state officials, but they were able to come online by October, fueling part of the production rise.
Still, the state’s oil producers only fracked 43 wells in October, 65 percent fewer than the previous month, an ominous harbinger as at least 110 must be completed each month to maintain long-term production.
The state produced 1,168,950 barrels of oil per day (bpd) in October, compared with 1,162,159 bpd in September, according to data from the DMR, which reports on a two-month lag.
The number of producing wells hit an all-time high in October of 13,173.
The count of drilled-but-uncompleted (DUC) wells fell 11 percent to 975, bucking a months-long trend where the number gradually grew.
The DUC well count is an estimate compiled by Helms and includes wells on confidential status that he estimates may not be drilled. Such wells ultimately could be drilled, affecting the estimate.
Helms said he does expect the DUC number to rebound in November.