• 3 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 6 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 11 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 14 minutes Democrats through impeachment process helped Trump go out of China deal conundrum. Now Trump can safely postpone deal till after November 2020 elections
  • 2 hours Shale Oil Fiasco
  • 19 hours Everything you think you know about economics is WRONG!
  • 1 day Global Debt Worries. How Will This End?
  • 16 hours Wallstreet's "acid test" for Democrat Presidential candidate to receive their financial support . . . Support "Carried Interest"
  • 33 mins Natural Gas
  • 3 hours USA v China. Which is 'best'?
  • 3 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 1 day Judiciary impeachment: Congressman says Sean Misko, Abigail Grace and unnamed 3rd (Ciaramella) need to testify.
  • 2 days My interview on PDVSA Petrocaribe and corruption
  • 2 hours Aramco Raises $25.6B in World's Biggest IPO
  • 5 hours Winter Storms Hitting Continental US
  • 2 days Quotes from the Widowmaker
  • 1 day Tesla Launches Faster Third Generation Supercharger
Oil & Gas 360

Oil & Gas 360

From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…

More Info

Premium Content

North Dakota´s Oil Revenue Forecast Decreases By $1B

Prior administration’s forecast held oil production flat through 2019, with price above $50

Members of the House Appropriations Committee are looking at adopting a revenue forecast that is $1.1 billion less than what former Gov. Jack Dalrymple used before leaving office.

“Most of us are pretty concerned about what number Gov. Dalrymple had for the revenue forecast,” said Appropriations Chairman Jeff Delzer, R-Underwood.

Thursday, members of each chamber’s Appropriations Committee will vote on the plan created by Republican legislative leadership. The plan adjusts projected oil prices as well as sales and income tax projections downward for the 2017-19 biennium, but keeps oil production levels flat from the last forecast.

Dalrymple’s December executive forecast estimated about $4.81 billion in general fund revenues for the 2017-19 biennium. The plan by GOP leadership calls for a starting point of $3.68 billion in the budgeting process.

“We’ve got a billion-dollar hole in the North Dakota economy that we really haven’t filled yet,” said Rep. Keith Kempenich, R-Bowman.

The proposed changes to the forecast include reductions in the projected collections of sales and income taxes and a proposed transfer of Bank of North Dakota profits to the general fund.

Leadership projects $1.795 billion in sales tax collections for 2017-19, a reduction of more than $146 million from Dalrymple’s forecast. A reduction of more than $19.6 million in income tax collections, to $693 million, for 2017-19 is also outlined in the updated forecast.

Related: Platts Sees OPEC Cuts Eliminating Oversupply By Q3

House leadership kills proposal to increase production and extraction taxes; lowers oil price model to $48 from $51-$53

Leadership also slashed a significant portion from the total by eliminating a proposal by Dalrymple to increase the combined amount of oil and gas production tax and oil extraction tax from its current cap of $300 million to $1 billion.
For oil and gas production in 2017-19, leadership calls for a $48 per barrel oil price for North Dakota crude, down from the $51 to $53 per barrel range used in Dalrymple’s proposal. If the legislative plan passes, the projection of bottoming out and holding at 900,000 barrels per day for the next two years would be maintained.

The prices being used are what officials commonly refer to as North Dakota prices. Crude from the state typically sells at a discount of several dollars from the price of West Texas Intermediate, a national benchmark.

Related: Has U.S. Gasoline Demand Peaked?

“This is the starting point for us for the next two years,” Delzer said.

Following the vote on the more conservative revenue forecast, lawmakers will update the forecast again in March.

House Majority Leader Al Carlson, R-Fargo, said leadership considered Dalrymple’s numbers a bit optimistic in terms of oil production, prices and sales tax revenues.

Sales tax revenues have been a significant factor in the state’s nearly $1.4 billion revenue shortfall in 2016, as energy production has dropped and agricultural commodities have slipped.

“Our adjustment is to a realistic number that industry agrees with,” Carlson said.

An increase in oil prices, or a reduction in the price discount on North Dakota crude upon completion of the Dakota Access Pipeline, could occur in 2017-19, according to Carlson, who said it’s better to err on the side of caution and not have to make further cuts during the next interim.

By Oil & Gas 360

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play