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April 12, 2012

North Dakota Oil in February at a record 558,254 barrels per day

North Dakota oil and gas report from Lynn Helms, Director of NDIC Department of Mineral Resources.

Jan Oil 16,935,846 barrels = 546,318 barrels/day
Feb Oil 16,189,355 barrels = 558,254 barrels/day (preliminary) (NEW all-time high)

Jan Gas 17,738,391 MCF = 572,206 MCF/day
Feb Gas 17,437,469 MCF = 601,292 MCF/day (preliminary) (NEW all-time high)

Jan Producing Wells = 6,624
Feb Producing Wells = 6,726 (NEW all-time high)

Jan Permitting: 170 drilling and 0 seismic
Feb Permitting: 181 drilling and 5 seismic (all time high was 245 in Nov 2010)

North Dakota likely passed California's oil production (about 540,000 barrels per day) and is almost at Alaska (563,000 barrels per day). Texas has over 1.4 million barrels per day.





The abnormally mild weather has resulted in increased hydraulic fracturing activity and increased production. Rig count is rising slowly and daily production increased just over 2% from January to February. Over 95% of drilling is still targeting the Bakken and Three Forks formations. The idle well count is falling with approximately 240 wells now waiting on fracturing services. More fracturing crews are moving to North Dakota from natural gas plays.

Crude oil take away capacity via pipeline is well below production. Rail and truck transportation are adequate to keep up with near term production projections. Due to the delayed approval and uncertainty over Keystone XL the bottleneck at Cushing, OK is now resulting in a North Dakota Sweet posted price to NYMEX-WTI discount of -25% and a NYMEX-WTI to Brent discount of -19%. This is forcing an increasing amount of North Dakota crude oil onto rail transportation where it can reach destinations that pay Brent price. Plans announced recently for a North Dakota to Cushing pipeline and reversal of Cushing-Houston pipelines are welcome news.

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