The new year in North Dakota looks like it will be another record-breaker in terms of oil and natural gas production levels, along with a few surprises that may include adding another shale formation to the prolific Bakken/Three Forks plays.

State oil/gas officials are anticipating that oil production will reach the 1 million b/d threshold in the first half of 2014 after already crashing through the 1 Bcf/d natural gas production level last September. The new records will be set with a relatively flat number of drilling rigs now varying from about 185 to 190 (see Shale Daily, Dec. 23, 2013).

An added geographical area to watch has emerged in the state’s oil/gas patch regarding prospects for new gas supplies from a part of the Niobrara Shale that extends into south-central North Dakota. Denver-based Strata-X Energy is stirring speculation with its four new permits from the North Dakota Department of Mineral Resources (DMR) to drill exploratory wells aimed at the Niobrara in Emmons and McIntosh counties, far from the heart of the state’s robust Bakken production.

When the state issued the permits, DMR Director Lynn Helms issued a press release because it is “so rare to see anything issued this far east of Highway 93,” a rough eastern boundary for the Bakken/Three Forks activity.

Called the Sleeping Giant Project, Strata-X said it has four drilling locations identified among 145,000 net mineral acres (190,000 gross acres) in the southeastern parts of the Williston Basin in North Dakota.

The publicly held exploration and production (E&P) company also has oil projects in California, Texas and Illinois, along with a project in western Australia. But in North Dakota it is touting both the strategic location and the Niobrara gas production potential.

Located on relatively flat agricultural land with existing roads and other infrastructure, Sleeping Giant is near two interstate gas pipelines, and field services are available in both Bismarck and Williston, the company said on its website.

“The Niobrara formation in this area has been overlooked despite gas shows and small flares being reported. In the mid-2000s four wells were drilled in this part of North Dakota to test shallow gas shows. None of them were completed as all were drilled off-structure for the Niobrara gas play.”

NGI‘s Shale Daily contacted Strata-X regarding more detail that the company has on past attempts to unlock Niobrara potential in North Dakota, but the company did not readily respond. DMR maintains online information tracking shallow gas plays in the state, but there is no recent information posted currently.

Something else to watch in 2014 outside the heart of the Bakken will be the Fort Berthold Native American Reservation E&P activity, given the sharp bump upward in Helms’ latest DMR production report earlier in December.

As of the end of October, Helms reported that there were fewer drilling rigs operating on the Fort Berthold lands (20 rigs: nine on fee lands and 11 on trust lands), compared to the last six to 12 months (25 in April, and 28 the end of November 2012) while production was way up (309,000 bbl the end of October, compared to 135,000 bbl the end of 2012).

The amounts of oil production on trust lands has gone from a few thousand barrels/month in late 2012 to 121,986 bbl in Helms’ most recent monthly statistics. As of the end of October, there were 1,076 active wells on the reservation, three quarters of them on trust lands.

There has been an increase of nearly 300 active wells this year, and an increase of potential wells from 1,479 to 2,314 during the past 12 months, said Helms, noting that 95% of the state’s drilling is still targeted in the Bakken and Three Forks formations.