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The latest trend in the Bakken involves the selling of assets as invested companies work to maintain cash flow, according to the state's top oil and gas regulator who says such actions are shifting the focus of his department.

The persistence of low oil prices for the past year has led the industry to cut costs, North Dakota Department of Mineral Resources director Lynn Helms said this week at the agency’s monthly update on oil and gas.

Production companies continue to evolve but may be running out of options to maintain cash flow.

“I don’t know of any other tools they have in their toolbox,” Helms said.

Following a sharp drop in oil prices, operators began relying on efficiencies being made in drilling operations to save costs. Then came delays in completing wells by hydraulic fracturing as well as large-scale layoffs.

Helms said this week the new trend for oil companies to maintain cash flow is selling Bakken assets. More than 700 wells are in the process of being sold by North Dakota operators in order to create cash flow for future drilling.

How effective this trend proves to be, as well as what may come after the selling of assets, is unclear.

Activities in the oil and gas division office have had to shift as well, according to Helms, who added that new policies in the past year concerning the flaring of natural gas and requiring the treatment of crude oil to reduce its volatility when transported from the state have been major factors as well.

“Clearly, we have changed our field inspection emphasis,” said Helms, explaining that more reviews and processing is being required of his staff as wells are sold.

Helms said wells “can’t be transferred if there are compliance issues.” 

MMIS system working so far

An IT project that replaced the state’s decades-old Medicaid management system largely has been operating as intended since it went live earlier this fall, state officials say.

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The Medicaid Management Information System project went live in early October following a two-month transition period away from a more than 35-year-old system. The system, overseen by the North Dakota Department of Human Services, went live after a series of delays and changes in project scope.

“The ND Health Enterprise Medicaid Management Information System (MMIS) implementation has generally gone well, and DHS is completing an anticipated three-month operations stabilization period. Ten provider payment cycles have been completed with $181 million being paid to ND Medicaid providers,” Department of Human Services spokeswoman LuWanna Lawrence said in an email this week.

An update on the MMIS implementation will be provided Tuesday in the Harvest Room at the Capitol before the interim Information Technology Committee.

During the course of the project, its budget increased from $62.5 million to more than $97.9 million. Of the total budget, about $85.5 million came from federal funds.

As of May 31, the most recent numbers available, approximately $66.4 million had been spent on the project, of which $58.3 million was federal dollars.

“As expected with an implementation of this magnitude, there have been system issues. The Medicaid providers have been very understanding and the department is working to correct all issues as quickly as possible,” Lawrence said.

More information on the project can be found at www.nd.gov/dhs at the ND Health Enterprise MMIS General Information link.

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(Reach Nick Smith at 701-250-8255 or 701-223-8482 or at nick.smith@bismarcktribune.com.)

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