North Dakota Markets Record Natural Gas Volumes, Reports Three-Year Permitting High

Despite a 2.5% drop in oil production, North Dakota saw a 1.5% monthly increase in natural gas production and a record volume of gas produced in July.

North Dakota production

Natural gas production averaged 3.1 Bcf/d, of which 3 Bcf/d, or 94%, was captured and brought to market while the remaining 6% was flared, according to the latest Department of Mineral Resources (DMR) statistics. This compares to June production of 3.06 Bcf/d with 2.79 Bcf/d.

July marked the first time in history that the state’s operators captured and marketed more than 3 Bcf/d.

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“We didn’t have record production, but the good news is that we did have record gas capture,” Lynn Helms, director of DMR’s oil and gas division, said Thursday.

Oil production fell to 1.07 million b/d in July from 1.1 million b/d in June. Helms said the decline in oil production came as a surprise.

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“I think we were expecting a slight increase and … that we would hit the 1.1 million b/d mark,” Helms said during a media briefing.

The most likely reason for the decline, he said, was that there were only 27 well completions in June. In July and August, 74 and 66 were completed, respectively.

The number of rigs in North Dakota was 45 on Thursday, down from an August average of 46. “The number of rigs stalled in the mid-1940s [a] slow increase expected over the next two years,” says DMR.

“What we keep hearing,” Helms said, “is the constant drumbeat that this is a skilled labor issue… that we are simply not able to attract the skilled labor that we need to put more rigs into operation.” and more hydraulic fracturing (fracking) crews.

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He added that “the Permian Basin is showing some success in this area,” while “the Williston Basin is not.”

The number of active tailcoat crews rose to 17 last week.

Drilling permits in the state saw a significant increase in August, rising to 102 from July’s 53. This was the first time since October 2019 that DMR has permitted more than 100 wells in a month.

“So that’s encouraging,” Helms said. “That would suggest that while we haven’t reached the 1.1 million b/d mark that we were talking about, it’s likely to come.”

The allowable surge could even mean production of 1.2 million barrels a day is on the horizon, he added.

The state’s number of drilled but uncompleted (DUC) wells fell to 465 in July from 483 in June.

“We would like to see that [drop] faster, but it’s sinking,” Helms said. He was “very happy” to see that the number of inactive wells fell by almost 100 to 1,655 in July.

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DMR noted in its monthly report that US natural gas storage levels last week were 12% below the five-year average, while the US Strategic Petroleum Reserve was at its lowest level since 1984.

The price of natural gas to be shipped to the Northern Border pipeline system in Watford City was $8.05/Mcf on Thursday (September 15), DMR said. NGI’s Northern Border Ventura price averaged $6,865 on Friday (September 16).

The Energy Information Administration (EIA), meanwhile, forecast average natural gas production in the Bakken Shale of 3.19 Bcf/d in September and 3.22 Bcf/d in October.

Oil production is forecast to average 1.18 million barrels per day in September and 1.2 million barrels per day in October, EIA researchers said.

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