With logistics for moving hydraulic fracturing (fracking) equipment snarled by mostly foul weather through May, North Dakota is facing a growing backlog of unfracked wells, according to Lynn Helms, the state's director of the Department of Mineral Resources (DMR).
While again on Monday reporting all-time record oil and natural gas production in May, Helms said the industry plans to focus on creating efficiencies in moving fracking equipment and materials during the next 12 months. At the end of May there were 500 wells waiting for fracking, he said (see Shale Daily, July 16).
"There is a big inventory, and we are going to see even larger monthly increases in production in June, July and August as we use up this inventory [of unfracked wells]," Helms said.
There is a desire among the exploration and production (E&P) companies to bring in more drilling rigs, but that is not likely to happen as long as the state continues to carry the big inventory of unfracked wells, Helms said. "I don't think the producers are going to be stepping out and spending a lot of money on drilling rigs when we've got a big pool of wells waiting on fracks."
The rig additions will come, but later than originally anticipated, Helms said.
During a webcast with news media Monday, Helms was asked about a slowdown in workforce growth to address the unfracked wells, and he said E&P companies have indicated that they plan to bring in additional frack crews in key locations (Minot, Dickinson and Williston) where the companies are headquartered.
Nevertheless, in response to another question, Helms said there have been hiring and training delays and some actual layoffs. He said the layoffs, however, were mostly focused on the expansion of natural gas gathering infrastructure, and that work is beginning to be completed.
"Most of the layoffs have been connected to gas expansion construction jobs," Helms said. "There have been some small impacts on adding drilling rigs, and the workers associated with the rigs because they continue to outpace completion crews, so there is some readjustments in companies between drilling and completion well personnel."
This has resulted in a delay in bringing in some new rigs and replacing others, he said. "There isn't the need now to add those 14 rigs to get back to 200."
Ultimately, the backlog will mean a big surge in production totals for June, July and August, said Helms, who is predicting 20,000 b/d increases in each of those months.