North Dakota went from flat to flatter for its June production numbers, but kept its No. 2 spot as the nation’s second-largest oil producer, according to the state’s latest production figures.
North Dakota crude oil production increased by a mere 143 barrels per day to 1.128,185 million barrels per day, while gas production increased slightly more, by 991 cubic feet per day, to 2.982 billion.
That was less of an increase than May, but still left North Dakota ahead of New Mexico production by around 86,000 barrels per day, North Dakota Department of Mineral Resources Director Lynn Helms said.
“It is very much a neck-and-neck race,” the state’s top oil and gas regulator said. “And they continue to field three times as many drilling rigs as North Dakota does. So I’m not sure, maybe it’s just the time lag that has us still in second place and we’ll see when the July numbers come out. That’s looking like it could be the month where New Mexico passes us and puts us into third place.”
There are good indications, however, that production could begin to tick up for North Dakota, Helms added.
“I think I would have to characterize the Bakken at this point as a sleeping giant,” he said. “You know, the COVID pandemic kind of put the industry to sleep, and it is struggling somewhat to wake up.”
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Among reasons Helms believes production is set to take off are the number of DUC available DUC wells and completions that are just high enough to keep production steady. Meanwhile, industry is hiring as many workers as possible for workover crews to keep what’s producing going. There’s also a record 16,825 wells producing right now, Helms said. Some of the top 10 are also telling Helms that more hydraulic crews are coming.
“We met with one of our top 10 producers, and they are adding a frack crew in September and another frack crew before the end of the year,” Helms said.
Helms added that the mother company of the Bakken company he’s talking about has about 5,000 acres in Arkansas that are on the market.
“That might clue you in to who it is,” he said. “They’ve indicated that the majority of the cash from that is going to go into their West Africa and Permian basin operations, but some of it may end up here in the Bakken. They still like the Bakken pretty well.”
That company plans to begin work on its capital budget, which includes drilling rigs, sometime between October and December.
“So around year-end we should hear from that very large corporation what their plans are for next year,” Helms said.
North Dakota has around 10 frack crews right now, Helms said, and based on his conversations with industry, he believes the state’s numbers are “inching” their way to the 20 that would be needed boost production above 1.5 million barrels per day.
On Friday, Aug. 13, there were 23 rigs listed as running. Helms said he’s been told by companies in the top 10 that they plan to add three rigs by year-end, which would bring that number to at least 25.
“Again, it seems like a sleeping giant. We have the potential to get back to and above 1.5 million barrels a day. We have the potential of getting 6 or 7 billion cubic feet of natural gas production and export and processing a day,” Helms said. “But the pandemic put our service companies and our operators to sleep and they’re being very disciplined about really ramping up activity. They’re paying down debt. They’re buying back stock. They’re paying back investors on the private capital side. And it looks like what they’ve been telling us that we’re not going to see significant rig count increases until next year is really coming to pass.”
Gas capture, meanwhile, has lost a percentage point statewide and is at 92 percent. Just 1 percent more than the minimum required. That shows the continuing need for more gas infrastructure, Helms said.
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