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Published: Mon, August 15, 2016
Economy | By Melissa Porter

In North Dakota, people vs. oil pipeline protest strengthens

In North Dakota, people vs. oil pipeline protest strengthens

North Dakota's production record was set in December 2014 at 1.22 million barrels daily.

"The breakeven prices are significantly lower, and that's worth some time talking about", said Lynn Helms, director of the Department of Mineral Resources (DMR) and the state's chief oil/gas regulator.

In a positive sign for the industry, the break-even price for oil production at existing wells, statewide, has slipped to $26 per barrel, Helms said.

That price is causing production to take an expected fall.

The magic number where oil production in the state starts to expand is $50 a barrel.

In order to maintain production, companies need to add 70 to 80 new wells each month, Helms said.

The drop reflects a trend that started in 2014, when output started to track down with oil prices. He said oil prices seem "stuck" in the $40/bbl area, while Bakken operators are counting on prices above $50/bbl to resume more hydraulic fracturing (fracking).

People against the Dakota Access Pipeline chant in opposition on Thursday Aug. 11 2016 at a site where a roadway was being constructed to begin the process of building the pipeline. The pipeline would start in North Dakota and pass through South Dakota
In North Dakota, people vs. oil pipeline protest strengthens

Natural gas output rose about 1 percent to 1.66 billion cubic feet per day, as producers collected more gas for processing. Helms attributes the increase to the focus of activity on the prolific core of the Bakken, where wells produce more natural gas.

Helms says you can continue to expect a decrease in production.

The four producing counties have slightly more than 11,000 of the state's 15,130 active wells capable of producing, along with 818 of the state's current 887 uncompleted wells.

Meanwhile, new second-quarter breakeven prices released by North Dakota show at least one of the state's most productive counties, Dunn, now able to produce a barrel of oil for $16/b WTI, lower than the $22/b required in Q1.

Just over 300,000 barrels per day left Bakken rail terminals in June, with the majority headed to the East Coast, followed by the West Coast refineries, Kringstad said.

The state had an uptick of oil transported by truck north to Canadian pipelines in June, which Kringstad said is likely in part due to the Fort McMurray wildfire in Alberta.

About 29 percent of Bakken crude was transported by rail in June compared to 57 percent by pipeline.

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