Oil drillers in North Dakota pumped out an average of over one million barrels of oil per day (bpd) in May for the second month in a row, and set another new monthly all-time record high for the state’s crude oil production, according to oil production data released today by North Dakota’s Department of Mineral Resources (see blue line in chart above). Producing more than one million barrels of oil per day in April and May is another important energy milestone for North Dakota, which has seen its oil production increase ten-fold over the last 8 years, from only 103,409 bpd in April 2006 to 1,039,635 bpd in May of this year.
Here are some other highlights of North Dakota’s record-setting oil and gas output in May:
1) The state’s average daily oil production increased by 28% compared to a year earlier, which was the largest year-over-year gain in six months. Remarkably, in only the last two and-a-half years since November 2011, oil production in North Dakota has more than doubled from 510,534 bpd to almost 1.04 million bpd in May.
2) For the tenth consecutive month starting last summer, North Dakota’s oil production in May represented more than 12% of all US oil. Five years ago in May of 2009, North Dakota produced less than 4% of total US crude output. Due to the phenomenal growth of oil output in the shale-rich Bakken fields, North Dakota’s share of US crude production has gradually increased, and exceeded 12.3% in May.
3) In dollar terms, the oil produced in North Dakota in May had a daily market value of more than $106 million at the average oil price of $102.18 per barrel for West Texas Intermediate (WTI) oil during the month. For the entire month of May, that would put the market value of North Dakota oil at almost $3.3 billion, setting a new all-time record for the dollar value of the state’s monthly oil output.
4) The Bakken oil fields in western North Dakota produced more than 975,000 bpd in May (see brown line in chart), and set a new all-time monthly output record, which also represented a new record-high 93.8% of the state’s monthly oil production. In contrast, the Bakken region produced less than 9% of the state’s oil output at the beginning of 2007, before breakthrough drilling techniques (hydraulic fracturing and horizontal drilling) were able to tap into a bonanza of unconventional oil in the shale-rich areas of western North Dakota. At the current pace of increases, production in the Bakken oil field is on track to surpass the million bpd milestone this month (July) and join an elite group of only ten super-giant oil fields worldwide to ever produce at the million barrel per day level at their peak daily production.
Bottom Line: May was another stellar month in “Saudi Dakota,” with average daily oil production surpassing one million bpd for the second straight month, and establishing yet another new record high for the state’s oil output at almost 1.04 million bpd. Sometime this month, the Bakken oil fields in the western part of the state will join an elite group of only ten oil fields in the world to ever surpass the million-barrel milestone for peak daily crude oil production.
The shale boom continues to make the Peace Garden State America’s most economically successful state – with growth in employment and personal income that lead the nation, the lowest state jobless rate in the country at 2.6% in May (and the lowest monthly jobless rate in North Dakota history), an enviable and whopping state budget surplus approaching $2 billion, the highest state GDP growth in 2013 of 9.7%, strong housing and construction markets (more than 800 permits for single-family homes were issued in just the month of May, setting a new all-time monthly record that was 57% above the previous record of 519 last August), thousands of landowners who have become millionaires from oil and gas royalties (estimated oil royalty payments of more than $21 million every day in May, at 20% of the approximately $106 million in market value calculated above; and an estimated additional $700,000 in payments every day for natural gas royalties), and jobless rates in 11 of the state’s 53 counties at 2.0% or lower in May (with Williams County at only 0.80%, the lowest county jobless rate in America).
North Dakota’s economic success, job creation, and energy-based prosperity is being driven by the development of the state’s vast energy resources, especially the vast oceans of shale oil and shale gas in the state’s Bakken region. The Peace Garden State, along with Texas, are the shining stars of The Great American Energy Boom, which continues to be the strongest reason to be optimistic about the US economy.