North Dakota posted a 1.5% month/month increase in natural gas production and a record high volume of gas captured in July, despite a 2.5% decline in oil output. 

north dakota production

Natural gas production averaged 3.1 Bcf/d, of which 3 Bcf/d or 94% was captured and sent to market while the remaining 6% was flared off, according to the latest statistics from the Department of Mineral Resources (DMR). This compares to production of 3.06 Bcf/d with 2.79 Bcf/d captured in June.

July marked the first time in history that operators in the state have captured and put to market more than 3 Bcf/d. 

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“We didn’t have record production but the great news is we had record gas capture,” said DMR’s Lynn Helms, oil and gas division director, on Thursday.

Oil production fell to 1.07 million b/d in July from 1.1 million b/d in June. Helms said the decline in oil output was a surprise.

 “I think we were anticipating a slight increase and…that we would reach that 1.1 million b/d mark,” Helms said during a media briefing.

The most likely reason for the drop, he said, is that there were only 27 well completions in June. July and August saw 74 and 66 completions, respectively.  

North Dakota’s rig count, meanwhile, stood at 45 as of Thursday, down from an average of 46 in August. “The drilling rig count has stalled in the mid-forties, with [a] slow increase expected over the next two years,” according to DMR.

“What we continue to hear,” Helms said, is “the steady drumbeat, that it’s a skilled workforce problem…that we just are unable to attract the skilled labor that we need in order to deploy more drilling rigs” and more hydraulic fracturing (fracking) crews.

He added that “the Permian Basin is seeing some success in that area,” while “the Williston Basin is not.”

The number of active frack crews rose to 17 last week.

Drilling permits in the state saw a major uptick in August, rising to 102 from 53 in July. This was the first time DMR has permitted more than 100 wells in a month since October 2019. 

“So that’s encouraging,” Helms said. “That would indicate that even though we didn’t reach that 1.1 million b/d mark that we have been talking about, it is likely coming.” 

The permitting uptick could even mean production of 1.2 million b/d is on the horizon, he added. 

The state’s tally of drilled but uncompleted (DUC) wells dropped to 465 in July from 483 in June.

“We’d like to see that [drop] faster, but it is dropping,” Helms said. He was “very happy” to see the inactive well count drop by nearly 100 to 1,655 in July.

DMR in its monthly report noted that U.S. natural gas storage levels stood at 12% below the five-year average as of last week, while the U.S. Strategic Petroleum Reserve was at its lowest level since 1984.

The price of natural gas delivered to the Northern Border pipeline system at Watford City stood at $8.05/Mcf as of Thursday (Sept. 15), DMR said. NGI’s Northern Border Ventura price averaged $6.865 on Friday (Sept. 16).

The Energy Information Administration (EIA), meanwhile, is forecasting Bakken Shale natural gas production to average 3.19 Bcf/d in September and 3.22 Bcf/d in October.

Oil output is forecast to average 1.18 million b/d in September and 1.2 million b/d in October, EIA researchers said.