Skip to main content
You have permission to edit this article.
Edit
North Dakota oil production regains million barrel mark

North Dakota oil production regains million barrel mark

{{featured_button_text}}

Wells are coming back online in North Dakota and that is boosting the state’s oil production up over the million barrel per day mark once again — but the boost could be short-lived, state officials said Tuesday. Soft demand and prices are likely to drive an up-and-down pattern in the state's crude oil and natural gas production for the next two years.

North Dakota reported 1.04 million barrels of crude oil per day for July and nearly 2.1 billion cubic feet per day of natural gas production. The state also reported a 91% gas capture rate.

That represents a 16.5% increase in production for both oil and gas, and a 19% increase in gas capture volumes.

But there haven’t been enough new well completions to make these production gains sustainable, North Dakota Director of Mineral Resources Lynn Helms said. 

It takes around 70 new wells per month to sustain production in the range of 1.25 million barrels per day. In May, however, just 12 wells were completed, Helms said. In June, 37 were completed and in July 59.

Helms said the state also only has 10 rigs that are drilling for oil right now, and it's not likely to see more any time soon. Oil prices are expected to remain quicksand soft amid coronavirus-crushed demand and a world supply glut caused by the Saudi-Russian price hustle earlier this year.

North Dakota still, as of July, had 3,700 inactive wells representing about 276,000 barrels per day in production, according to Pipeline Authority Justin Kringstad.

He thinks those wells have all likely been put back into production as of September, which will get North Dakota production above 1 million barrels, at least for a little while.

“But if we do not have the completions backing up that growth as the shut-ins come back online, we could very quickly see this up-down motion here during the second half of 2020," he said, referring to a graph of production scenarios.

Most projections surrounding energy don’t show pre-COVID demand coming back until late 2022, Helms said.

“So we are facing this for a couple of years, this sort of up and down being driven by West Texas Intermediate prices and the desire for companies to maintain their production and keep their production profile moving forward, so, yeah, we could be playing this game for a couple of years,” he said.

0
0
0
0
0

Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News