North Dakota has suffered an 81-percent decline in oil and gas revenues in April amid the coronavirus pandemic that forced producers in one of the United States' most prolific shale plays to cut production substantially.
For April, oil and gas revenues stood at just $38 million, local media reported, although the state government still expects total revenues for the current two-year budget cycle to be higher than forecast.
Oil production in North Dakota shrunk by 15 percent between March and April and is expected to have shrunk even more in May. As of April 15, oil producers active in the state had idled as much as 35 percent of producing wells.
The collective output of the wells idled since the start of March, which numbered 4,600, was some 260,000 bpd, the State Mineral Resources Director Lynn Helms told the Bismarck Tribune at the time. According to data from the state's Department of Mineral Resources, this is a large portion of the state's total oil output, which averaged some 1.45 million bpd in February.
Between March and mid-April, North Dakota oil producers idled some 40 percent of drilling rigs to cap production as the slump in oil demand caused by the pandemic caused oil prices to nosedive.
In mid-April, the state's Mineral Resources Director said that some oil producers were considering building storage facilities near the wells to stock up on the crude they have already pumped to sell it later when prices improve.
Meanwhile, some wells have been abandoned, and producers will begin plugging them in July, the AP reported earlier this month. North Dakota will use some $66 million in federal aid to finance the operation, which will involve at least 239 wells and other sites. Following the plugging, plans are to reuse the land for agriculture or return it to its natural state.
By Irina Slav for Oilprice.com
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