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North Dakota is new oil centre of US

Thursday, October 04 07:42:45

North Dakota passed Alaska in 2012 to become the No. 2 oil-producing state in the United States behind Texas, generating massive state budget surpluses from taxes on oil production and creating thousands of millionaire landowners. Here are some facts about the North Dakota oil rush:

OIL PRODUCTION * North Dakota oil production reached a monthly record 20.9 million barrels in July, the latest month available, from 7,303 producing wells. Production has surged more than five-fold from 3.8 million barrels in July 2007 and producing wells have more than doubled from 3,559. LOCATION * Four counties in sparsely populated western North Dakota -- Mountrail, McKenzie, Williams and Dunn in that order -- produced about 15.5 million barrels of oil in July, or 74 percent of the state's total production. ROYALTIES * Royalties are paid to those who own the "mineral rights" to the land, usually farmers or their family. They are based on oil produced and sold mainly in sections of 640 acres or 1,280 acres (258 or 517 Hectares), one or two square miles. In North Dakota, mineral rights often are heavily divided among heirs or sold to others. * In simple terms, a well producing 100 barrels of oil per day sold at $80 a barrel would generate $248,000 in a 31-day month. After state taxes on extraction and production totaling about 11.5 percent, a one-fifth royalty would generate $43,896 for the rights holders that month. INCOME * North Dakota's personal income per capita grew faster than any other state in the last five years. * North Dakota vaulted to No. 7 overall among U.S. states in per capita personal income at $47,236 in 2011, up from No. 38 in 2006, when the oil boom started. * Mountrail County's per capita income roughly doubled from 2005 to 2010, the latest figures available, to $52,027. That made Mountrail No. 85 in per person income out of more than 3,100 counties in the nation, and in the same league as the island of Manhattan in New York City, Nantucket in Massachusetts and Marin County, California. Williams County, North Dakota was ranked No. 59 in the U.S., McKenzie County No. 90 and Dunn No. 241. POPULATION * North Dakota's population was estimated at 683,932 in 2011 by the U.S. census. Mountrail County had 8,097 people, McKenzie 7,019, Williams 24,374 (because the largest town in the region, Williston is the county seat), and Dunn 3,720 people, the U.S. census estimated in 2011. * The population of North Dakota is expected to increase 25 percent from 2010 to 2025 to 841,820, according to a North Dakota State University study. Ten oil-producing counties are expected to grow by at least 50 percent, adding to shortages of affordable housing. EMPLOYMENT * North Dakota had the lowest unemployment rate in the nation at 3 percent in August, while the oil-producing counties had rates below 2 percent. The U.S. unemployment rate was 8.1 percent in August. * North Dakota had 22,800 people employed in mining and logging (which includes energy) in August, up 33 percent from a year earlier. BUDGET SURPLUS * The latest state estimates project a $1.6 billion general fund surplus in the two-year budget that runs through June 2013, boosted by much stronger than expected oil and gas production and extraction taxes, sales taxes and personal income taxes. * The state is projected to end the 2012 budget year with the third largest surplus in the nation after other energy-rich states Alaska and Wyoming. BANK DEPOSITS * Bank deposits have soared in the oil producing counties as people park their windfall in local institutions. * First International Bank & Trust of Watford City, the biggest bank based in the state's oil counties, had total deposits of $1.03 billion at the end of June, up from $629 million in June 2006. h American Bank Center in Dickinson had total deposits of nearly $844 million at the end of June, up from $208 million in June 2006. In October 2011, it acquired Scandia American Bank & Trust of Stanley, whose deposits had soared to $176.6 million in September 2011 from $42.3 million in June 2006. (SOURCES: North Dakota state reports; North Dakota State University research for a state housing finance agency assessment; reports to FDIC; U.S. Census data; and data from the U.S. Bureau of Labor Statistics and Bureau of Economic Analysis; National Council of State Legislatures. ( C ) Reuters