BISMARCK, N.D. — North Dakota oil drillers are on pace to set record annual crude production for the sixth consecutive year and are nearing a milestone of a million barrels of oil a day.
The state Department of Mineral Resources said Friday that crude production through September totaled 226.1 million barrels, down only 17 million barrels from the record 243.1 million barrels produced in all of 2012.
The agency said crude production in September totaled a record 931,940 barrels a day, or nearly 28 million barrels for the month.
September statistics are the latest available because oil production numbers typically lag at least two months. Current drilling activity indicates the state likely surpassed last year’s record sometime in October.
North Dakota is on pace to surpass 1 million barrels daily early in 2014, said Lynn Helms, director of the Department of Mineral Resources.
Helms, the state’s top oil regulator, called the million-barrel mark a “magic number.”
“We’re looking forward to that,” he said. “We think that is cause to celebrate.”
Data show 185 rigs were drilling in North Dakota’s oil patch on Friday, equal to the average daily rig count for the year. North Dakota had a record 9,682 producing oil wells in September, up from 9,475 in August, and almost 3,600 more than in September 2011.
North Dakota trails only Texas in oil output. North Dakota has risen from the ninth-biggest oil state just seven years ago with improved horizontal drilling techniques in the rich Bakken shale and Three Forks formations in the western part of the state. About 95 percent of drill rigs operating in North Dakota’s oil patch are targeting those formations.
Texas produced an average of nearly 1.8 million barrels of oil daily in August, according to the latest figures available from the Texas Railroad Commission, which tracks that state’s crude production.
North Dakota sweet crude was fetching $71.25 a barrel on Friday, down nearly $14 from October and more than $20 a barrel in September.
Justin Kringstad, director of the North Dakota Pipeline Authority, said more than 60 percent of North Dakota crude is being shipped by rail and depressed prices “are driving barrels” to East, West and Gulf Coast refineries. In those markets, shippers are fetching premium prices comparable to Brent crude, the global benchmark used in pricing oil imported by U.S. refineries.
The ability to move crude to market is keeping pace with North Dakota’s oil production, Kringstad said.
North Dakota began producing oil in 1951. Helms said the state tallied its 1 billionth barrel of oil in 1986 and the 2 billionth barrel in 2006. The state is on track to tally its 3 billionth barrel of oil next year, he said.