North Dakota production declines

By Emily Aasand | June 24, 2015

Due to the oil price environment, North Dakota’s state production numbers remains in a constant state of change. In April, the state’s oil production decreased from the previous month, following March’s production increase.

According to the Department of Mineral Resources’ monthly Director’s Cut, the drilling rig count continues to decline, dropping 17 from March to April, eight more from April to May, and has since fallen four more from May to today. Lynn Helms, director of the DMR Oil and Gas Division, said operators have been experimenting with running fewer rigs than their planned 2015 minimum to see if drill times and efficiencies will continue to improve. As of today, more than 98 percent of drilling now targets the Bakken and Three Forks formations.

The statewide rig count is down 64 percent from the all-time high and is down 77 percent in Divide county, 71 percent in Dunn county, 57 percent in McKenzie county, 68 percent in Mountrail county, and 63 percent in Williams county.

The number of wells completed is also down. Well completions dropped from 244 in March to 94 in April. At the end of April, there were an estimated 925 wells waiting on completion services, an increase of 45. In order to maintain production near 1.2 million barrels per day, the DMR says 110 to 120 completions must be made per month.

“Continued oil price weakness anticipated to last into next year is by far the primary reason for the slow-down,” said Helms. He added that drilling permit activity has decreased slightly from March to April and significantly more from April to May as “operators positioned themselves for low price 2015 budget scenarios.”

The April gas capture percentage was 82 percent with the Tioga gas plant operating at 84 percent of full capacity. According to the DMR, expansions of gas gathering from south of Lake Sakakawea remain delayed.


BLM Hydraulic Fracturing Rule Update

The U.S. Department of the Interior’s recently released final rule on hydraulic fracturing activities performed on public or tribal lands has drawn criticism from many states with existing well stimulation regulations, including North Dakota, Colorado, Utah and Wyoming.

In early June, North Dakota filed a request in federal district court for a preliminary injunction against the BLM to block the BLM Hydraulic Fracturing Rule from going into effect on June 24.

The U.S. District Court for the District of Wyoming scheduled a hearing on June 23, to hear North Dakota’s requests. North Dakota is asking the court to temporarily prevent the BLM rule form taking effect until the court has an opportunity to review the challenges to the rule filed by the states.

The states involved in the lawsuit claim that most of the federal and tribal lands on which the BLM has jurisdiction and where the new federal rule will apply have been effectively regulating oil and gas operations for decades. Because of the differences in geology, hydrology and topography, the states believe that they are in a better position to develop, administer and enforce laws and regulations related to fracking and other oil and gas developments.


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