N. Dakota will become No. 2 oil producing state next year

BISMARCK (AP) - "North Dakota will likely leapfrog California and may even overtake Alaska in the next year - far outpacing earlier industry predictions - to become one of the nation's three biggest oil-producing states, a government regulator said. Government and industry officials had predicted that North Dakota likely would hit the No. 2 spot within the decade but the explosion of drilling activity has accelerated the timeline.

Not considered a big oil state until recently, North Dakota went from the ninth-biggest producer in 2006 to fourth in 2009, where it currently stands. This boom is thanks to advances in drilling and hydraulic fracturing techniques and a rise in oil prices that made it more profitable for companies to tap into the vast reserves trapped in the Bakken and Three Forks shale formations.

North Dakota's 5,951 wells produced about 444,000 barrels per day in August, compared to about 350,000 last August. With nearly 200 wells being drilled and plans for 1,500 to 2,000 new wells over the next year, North Dakota should overtake California as the nation's third-largest producer sometime in the next 12 months, said Lynn Helms, the director of North Dakota's Department of Mineral Resources. 

"We should pass California by the third quarter of next year," he said. The rise in state's oil production, which forecasters predict could reach up to 700,000 barrels daily by 2015, comes as oil production is slowing in California and Alaska.

Steve Grape, the domestic reserves project manager for the U.S. Department of Energy's information administration, said California produces about 539,000 barrels of oil daily, compared with about 550,000 barrels in Alaska and about 1.2 million barrels daily in Texas.

"No data I've seen shows California's production increasing, so they do have a target on their neck," Grape said. "And Alaska's production is declining faster than California's.

Oil companies have said that drilling in North Dakota is profitable if oil prices are more than $50 a barrel."

MP: The chart above shows projected daily oil production in North Dakota through December 2013, assuming that the recent production increases continue for the next several years.  In that case, North Dakota will surpass oil production in California by June of next year, and then Alaska by next August.