Oil tax revenue rise

By  | 

BISMARCK, N.D. - Oil tax revenues are on the rise, 42% higher than forecasted in February, according to the state tax commissioner.

North Dakota could soon see a turn around on it's budget revenue, thanks to better than expected oil production.

These oil rigs have been producing at near record levels. Despite being in the middle of winter, North Dakota's oil production is way up.

"We're actually just below record production of 1.2 million barrels, are holding strong just below 1.2 million, and oil prices are about ten dollars more than we had anticipated in the forecast," said Ryan Rauschenberger, Tax Commissioner.

There are currently only 59 active drilling rigs, according to the Department of Mineral Resources, versus 192 back in 2014.

"The technology has improved, the wells are outperforming wells that we were drilling two to three years ago, so it's better production out of these wells. We haven't seen a huge ramp up in activity, but we're just getting more oil out of each well. We think we're going to continue to see that, and as we get nicer weather, we're going to see more and more activity," said Ron Ness, Petroleum Council president.

Rauschenberger says some of the increase in price is thanks to the Dakota Access Pipeline.

"Now that we have better infrastructure, a sort of oil superhighway to get oil to market, we're getting a better price. That has contributed three to four dollars a barrel to a barrel of oil in North Dakota," Rauschenberger said.

According to Rauschenberger we could see an extra quarter of a billion dollars in the state budget in the next 24 months if production continues to exceed expectations.

January of this year saw a $60 million increase over last year in oil tax revenue.