#4 — Oil field slowdown afflicts Minot area

Jill Schramm/MDN The slowdown in the oil fields in North Dakota hampered growth in Minot and surrounding area, including real estate and housing construction.

The slowdown in the North Dakota oil patch influenced many lives and facets of the city of Minot and surrounding area in 2016.

Oil production in the state hovered around slightly more than a million barrels a day for much of the year, then dropping from a million barrels a day to 981,039 barrels a day in August, the North Dakota Department of Mineral Resources reported.

Oil production continued below a million barrels a day in September but then crawled up to 1.04 million barrels a day when state regulators released the October figures in early December.

The most recent oil production figures normally are about two months behind.

Rigs actively drilling in the oil fields had declined from 64 in December 2015 to 52 the first month of 2016.

That rig number fell even further to 32 in March. It stayed in the high 20s in April and May and then remained in the low 30s from July through October.

The rigs numbered 27 in May, the lowest number of rigs actively working in the oil field since July 2005.

The rig count finally started going up in November with 37 rigs actively working and by early December, it reached 40. This was still very low compared to mid-2012 when the state had an all-time high of 218 rigs working in the oil field, the N.D. Department of Mineral Resources reported.

Although the rig count is down in each of them, the five most active counties for oil production are Divide, Dunn, McKenzie, Mountrail and Williams.

“Over 98 percent of the drilling now targets the Bakken and Three Forks formations,” said Lynn Helms, director of the N.D. Department of Mineral Resources.

Only one rig was actively drilling on federal surface in the Dakota Prairie Grasslands, Helms said in early December.

He said eight rigs were actively drilling on the Fort Berthold Reservation in early December. The 1,523 active wells on the reservation were producing 180,306 barrels of oil a day. Fort Berthold is one of the hotspots for oil production in the state. Wells still waiting on completion numbered 161 on Fort Berthold in December.

Oil prices started out in January at $21.13 a barrel and dropped to $18.07 a barrel in February. For the next nine months, the oil price fluctuated but remained in a range between $26.62 and $39.31 a barrel, according to the Mineral Resources Department. In early December, the price was at $40 a barrel, a long way off from the all-time high of $136.29 a barrel on July 3, 2008.

Helms said operators are shifting from running the minimum number of rigs to incremental increases throughout  2017, as long as oil prices remain between $50 a barrel and $60 a barrel West Texas Intermediate.

Despite the drop in oil production and oil prices, the state’s natural gas production’s most recent figures (October) showed an all-time high of 1.7 billion cubic feet per day.

The state’s number of producing wells also climbed to a preliminary new all-time high of 13,457 in October.

Eighty-four percent of the wells (11,325 wells) are now unconventional Bakken-Three Forks wells and the rest produce from legacy conventional pools, Helms said.


With the slowdown in the oil fields, Minot and other communities felt the pain.

From a time when new apartment buildings, single-family homes, townhouses, condos and new businesses seemed to be popping up all over, much of that came to a screeching halt – with a few exceptions.

Building permits in the city of Minot for single-family, townhouses, condos, apartment units and new commercial dropped from a valuation of all permits from $144.4 million (year to date) in 2015 to  $69.4 million (year to date) in 2016, according to the Minot Area Chamber of Commerce’s December Minot and Ward County report.

Vacancy rates for apartments were high and rental units’ owners were hurting from a lack of occupants or at least not the numbers they would have liked to have to fill their units. Some offered special deals just to entice people to rent from them.

The number of single family homes sold in Minot dropped from 612 (year to date) in 2016 to to 516 (year to date) in 2016.

The number of single family homes sold in Minot and surrounding totaled 694 (year to date) in 2016 compared to 811 (year to date) in 2015.

The average sale price for a single family home sold in Minot dropped slightly – $232,897 (year to date) in 2015 to $231,104 (year to date) in 2016.

The unemployment rate in Minot and Ward County rose over the past year from 2.5 percent in October 2015 to 3.1 percent in October 2016 in Minot and from 2.4 percent in October 2015 to 2.9 percent in Ward County. These are higher than the state’s unemployment rate of 1.9 percent in October 2015 and 2.2 percent in October 2016.

But the North Dakota, Minot and Ward County unemployment rates are much lower than the U.S. unemployment rate of 4.8 percent in October 2015 and 4.7 percent in October 2016.

The number of total airline passengers at the Minot International Airport dropped significantly – from 316,574 as of October 2015 to 264,684 as of October 2016.

Although the slowdown in the North Dakota oil field was felt by many in the city and surrounding area, economic hope rebounded at the end of 2016 with a major Air Force project being planned.

The Air Force recently launched the multi-billion dollar, long-term program to replace the 1970s-era Minuteman III intercontinental ballistic missiles in the Minot missile field.

The program primarily involves upgrading the missile, communications, launch facilities and launch control centers.

It will have a significant impact on the Minot community and other communities with nearby Air Force ICBM wings. Minot AFB’s 91st Missile Wing is responsible for operating, maintaining and securing 150 Minuteman III missiles in underground facilities across several counties. The two other wings are at F.E. Warren AFB in Wyoming and Malmstrom AFB in Montana.

In November a team from Lockheed Martin visited Minot to make plans for the major missile upgrade. While in the city the team members met with Minot Area Chamber of Commerce officials to discuss the program and the effect it will have on the local community.

Lockheed Martin, Boeing and Northrop Grumman, all qualified military contractors, have submitted proposals recently for the ICBM upgrade program.