OREANDA-NEWS. December 14, 2016. North Dakota's crude production climbed back above 1mn b/d in October as operators boosted output in previously restricted wells because of higher prices.

October crude output averaged 1.04mn b/d, up by 71,400 b/d or 7.4pc from September, according to data released today. Natural gas output rose by more than 6pc to about 1.7 Bcf/d (48mn m?/d), a record high.

"This big production increase comes as a surprise," said Department of Mineral Resources director Lynn Helms.

The state's crude output had dropped below 1mn b/d in August for the first time since March 2014.

Helms said the crude increase in October was largely in three counties — McKenzie, Divide and McClean — and reflected operators bringing previously restricted wells to higher levels of production as North Dakota sweet crude prices rose to around \\$40/bl.

The state's output is not likely to continue above 1mn b/d because of harsh winter conditions that make it difficult and expensive to use hydraulic fracturing to drill new wells. Operators in the state use more than 90pc fresh water for hydraulic fracturing. The mix of water and chemicals must be maintained above 100°F for successful frack jobs, which is increasingly expensive and difficult in sub-zero weather.

North Dakota today has 40 active drilling rigs, up by three from the end of November. The all-time high was 218 rigs in May 2012. Operators expect to add another 10 rigs by the middle of next year, state officials said.

Drilling permits in North Dakota fell to 76 in November, down by 6 from the previous month. The all-time high was 370 in October 2012.

Wells waiting on completion at the end of October were 860, down by one from the end of September. "There is still a backlog of wells waiting to be fracked and wells waiting to be returned to production," Helms said.

North Dakota is home to the Bakken formation, the third most productive US oil shale field. Crude production grew sharply there from about 150,000 b/d in 2008 to about 1.2mn b/d in late 2014 before the recent slide, creating a major supply basin which has changed US market dynamics.

The percent of crude in the Williston basin in October which moved by rail was 35pc, up from 29pc in the previous month.

About 55pc was transported by pipeline, 8pc was refined in the region and 2pc was moved by truck to Canadian pipelines. The bulk of the Williston is in North Dakota.