North Dakota oil and gas production dropped in September by just over 2%, hampered by poor weather.
"The best way to describe September is soggy," Lynn Helms, director of the North Dakota Department of Mineral Resources, said in a conference call. Two weeks of "continuous rain" led to a lot of road closures and other negative effects that restricted production, he said.
Production in October looks better than in September, and it may set a record, Helms said.
Still, some negative signs — a falling rig count and a big increase in inactive oil wells — are potential harbingers for the winter.
North Dakota, the nation's second-largest oil producing state after Texas, churned out 1.44 million barrels of oil per day in September, down from August's record high of 1.48 million barrels per day. Natural gas production was also off a bit from its August record.
The drill-rig count in North Dakota — after sitting in the mid-60s for most of the year's first half — has fallen this month to 55, a low for 2019. The rig count is an indicator of new oil wells, and it has been falling throughout the U.S. oil patch in recent months.
"The rig count has dropped as companies have begun to report that is hard to raise capital and oil prices weren't really supporting growth," Helms said. Both private capital and the stock market "aren't funding growth. They are looking for a return on investment."
Essentially, while oil production has surged in the United States over the past year or so, oil frackers' profits haven't.
