BISMARCK, N.D., June 16 (UPI) -- The decline in crude oil prices is the primary reason that production from North Dakota shale basins fell 6 percent, a state regulator said.
The North Dakota Industrial Commission reported total crude oil production in April, the last full month for which data are available, at 1.04 million barrels per day, about 6.3 percent lower than March and 15 percent below the all-time high of 1.23 million bpd reported in December 2014.
After setting a record in March, natural gas production dropped off by 5.5 percent as the drop in oil prices meant companies had less capital to invest in exploration and production.
"Oil price weakness is the primary reason for the slow-down and is now anticipated to last into at least the third quarter of this year and perhaps into the second quarter of 2017," NDIC Director Lynn Helms said in a statement.
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Crude oil prices fell 48 percent from July 2014 to mid December of that same year. Since then, prices are down another 12 percent to hover in the upper $40 range for West Texas Intermediate. That trend is mirrored by rig counts, which twice tied a record low in North Dakota so far this year.
The NDIC said the statewide rig count is down more than 85 percent from the all-time high of 218 set in 2012. As of Thursday, there were 27 rigs in active service in North Dakota. Some recovery was recorded in recent weeks, though Helms said most companies drilling into North Dakota shale were positioning themselves for a lower oil price through 2016.
WTI briefly passed $50 per barrel in June, but traded Thursday morning at around $47.30.
In early May, North Dakota Gov. Jack Dalrymple called for a state budget that was about 90 percent of the 2015-17 appropriation. Tax revenues are falling short and the budget situation in the state is much different than it was two years ago when oil was selling for more than $100 per barrel, he said.
