According to records for November 2014, North Dakota hit an oil production high, which is actually quite impressive given the current oil climate. Many companies today are actually drilling fewer wells and putting up fewer rigs to help them combat the lower price of oil. Even though many of the large companies in North Dakota are scaling back on their exploration operations, the wells they already have in place have been providing them with massive amounts of oil.
The state’s Department of Mineral Resources said that companies through ND were putting out 1.19 million barrels a day in November. They were able to reduce costs by tapping only the most productive wells. While many who aren’t in the field may not realize it, North Dakota is actually a huge oil producer. The only other state that surpasses it is Texas.
Even though they had a great output, companies there and in other states are still suffering. The price of oil is lower than it has been in a number of years, with the price dipping to $45 a barrel recently. The price per barrel of North Dakota sweet crude is even lower – only $29.29 a barrel. This is the lowest it has been in about eight years. At its high, it was $136.29 a barrel.
The number of active rigs in North Dakota is just 158. This is the lowest it has been in half a decade, and estimates are that the number will continue to drop – down to around 125 – this year. The only thing that could stop this from happening would be an increase in the price of oil, but as of right now, that seems unlikely. Because the US is producing such a large amount of oil in this energy boom, other nations, including those aligned with OPEC, are refusing to cut back on their output. This is causing everyone to suffer.
What does this mean for people who are working for the oil companies? They should expect some more cutbacks in the field in the coming months, certainly. The companies are trying to keep their output high, but they still need to reduce expenditures where they can.
How long this price drop will last is anyone’s guess right now. Some experts feel as though it can’t go on much longer, but OPEC seems determined to stay the course and force other countries to reduce their own output so they can finally increase the prices. It will be interesting to see how ND and other states fare.
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