Bakken Shale natural gas production in North Dakota topped 3 Bcf/d in October, while oil exceeded 1.5 million b/d, setting new records in the state.

Department of Mineral Resources (DMR) Director Lynn Helms reported a month/month oil production increase of 5% and a 4% hike over the same time for gas. Oil prices exceeded estimates by 2% in October at nearly $42.00/bbl for Bakken sweet crude.

Helms noted that a recent decision from the Organization of the Petroleum Exporting Countries to make deeper cuts in global production is good news for oil prices going forward. “They are going to take another half-million barrels daily off the market, so that will provide some very needed support to oil prices,” he said, noting that oil prices have increased since October. 

The  records were set during a period in which rig counts have steadily dropped from 61 in September to 53 last Friday. “The rig count drop is more seasonal and capital-centered than anything else,” Helms said.

With a continuing 82% gas capture rate in October, the latest period for which data is available, oil production reached 47.05 million bbl (1.51 million b/d) in October, compared to 43.3 million bbl (1.44 million b/d) for September.

Natural gas production hit 95.1 Bcf (3.07 Bcf/d) in October, compared to September totals of 88.3 Bcf ( 2.94 Bcf/d). Captured volumes were 78.2 Bcf  (2.5 Bcf/d) in October compared to 72.8 Bcf (2.4 Bcf/d) in September.

Other positive developments include the start of operations earlier this month of Oklahoma-based Oneok Inc.’s Elk Creek natural gas liquids (NGL) pipeline. Helms believes the system will aid in North Dakota’s struggles to curtail flaring.

Elk Creek adds a takeaway capacity of 240,000 b/d with the capability of expanding to 400,000 b/d.

Helms called the NGL pipeline’s opening “a really significant event,” allowing several new gas processing plants to operate at 100% capacity. “They’ve all been operating well below capacity,” he said.

“You can’t overemphasize how important that is to what has been happening in terms of infrastructure constraints and the impacts on gas capture. By December, we should see significant improvements in gas capture.”

On the negative side, Helms said the continuing decline in natural gas prices -- as evidenced by the gulf between estimated oil wellhead values and those for natural gas -- is making “it very difficult to attract investment.”

When production results for December are tallied in a couple of months, the volumes should also be up significantly, Helms said, noting that break-even numbers in all the producing counties are now economic.

“When you adjust these current break-evens for current West Texas Intermediate (WTI) prices, there is no place in the Bakken/Three Forks that is not economic today in terms of WTI prices,” Helms said. Other plays in the state are not economic, he added.