North Dakota oil production grew by 1% in April after a 3% drop in March, the Department of Mineral Resources said Tuesday. Natural gas production increased by 2% in April.
April oil production averaged 1.13 million barrels per day, up from 1.12 million barrels per day in March, according to preliminary figures. The all-time high was 1.52 million barrels per day in November 2019. The state’s figures lag two months as officials collect and analyze data from energy companies.
State Mineral Resources Director Lynn Helms said April’s production numbers were good considering the cold spell that North Dakota encountered that month.
He also expressed satisfaction with progress on abandoned well plugging and reclamation as well as industry efforts to combat wasteful natural gas flaring.
He expressed some concern over volatility in oil prices due to global economic issues.
Saudi Arabia cut its monthly oil production earlier this month. This had a smaller effect on oil markets than Helms said he would have expected.
“The market said ‘meh,’ and that is really kind of surprising,” Helms said.
West Texas Intermediate crude, the U.S. oil pricing benchmark, was trading near $67 per barrel on Tuesday, compared with an average of $79 in April and $73 in March. The all-time high was $134 in June 2008.
The state’s drilling rig count has fallen to 38 due to road restrictions as well as company mergers and acquisitions but is expected to return to the mid-40s, and continue to gradually increase over the next two years, according to Helms.
He believes a planned arrival of oil workers from Ukraine will help improve the state’s numbers in the latter half of the year.
“If this workforce program works as well as we hope, we’re going to see that rig count bounce back, and that adds a lot of dollars to North Dakota’s economy,” he said.
The North Dakota Petroleum Council in April announced the hiring of former Lt. Gov. Brent Sanford to be project manager of Bakken Global Recruitment of Oilfield Workers, or GROW, a new initiative to bring workers to the oil field through immigration, focusing initially on Ukrainians.
Plugging and reclamation
The state also is continuing the plugging and reclamation of orphaned oil wells, which are abandoned wells without a responsible operator, likely due to a bankruptcy.
This is made possible with $25 million in funding from the federal Infrastructure Investment and Jobs Act. With this money the state plans to plug 88 wells and reclaim 139 sites.
The first reclamation crew went out in late May. The state has plugged 29 of the 88 wells, according to Helms.
“That’s going to allow us really to bring all of this orphan well stuff to a close over the next five to 10 years,” he said.
Natural gas
Helms praised industry efforts at reducing the wasteful flaring of natural gas due to a lack of pipeline infrastructure and processing capacity. Producers had a 95% capture rate across the state in April. Capture in the Bakken was at 96%, which is the second time the state has reached this level. The state target is 91%.
Gas capture reached 98% on the Fort Berthold Reservation in April — an improvement for an area where Helms said the industry has previously encountered difficulties in building infrastructure to reduce flaring.
“We have never seen 98% in gas capture before,” he said.
These numbers are especially impressive considering the current price of natural gas, according to Helms.
The price of natural gas delivered to Watford City has fallen to its lowest level since the third quarter of 2020 because of an oversupply in the Midwest, according to Mineral Resources.
Helms expressed frustration at the limitations in getting more natural gas to market.
Two projects are set to carry North Dakota gas produced in the Bakken to the Cheyenne hub on the Wyoming-Colorado border, according to North Dakota Pipeline Authority Director Justin Kringstad. One is a project by TC Energy and Kinder Morgan; it’s expected to be in service by March 2026. The other, a WBI system, is expected to be online late this year, according to Kringstad.
Source: Bismarck Tribune
