September 18, 2013

Another record month of oil, gas production

By Kate Ruggles
Farmer Staff Writer

The North Dakota production totals are in for the month of July, and McKenzie County continues to out-produce other state counties in the production of both oil and natural gas.
The state as a whole continues to reach new production levels as, at the end of July, it set another production record with 874,460 barrels of oil and 30,079,449 MCF of natural gas produced daily in North Dakota.
McKenzie County produced 7,637,917 barrels of oil in the month of July and 11,131,454 MCF of natural gas. This averages out to 246,384 barrels of oil and 359,079 MCF being produced daily in McKenzie County. These totals make McKenzie County the number one oil and natural gas producer in North Dakota for four months in a row.
The production totals are a welcome sight to the North Dakota Industrial Commission, not just because they get the state closer to producing one million barrels of oil per day, but also because they occurred as a result of a higher number of well completions.
“Rig counts decreased slightly from June to July, but the number of well completions jumped from 102 to 251, resulting in a 6.4 percent increase in oil production,” states Lynn Helms, director of Mineral Resources for the North Dakota Industrial Commission. “That number of completions is almost three times the threshold needed to maintain production.”
Well completions had been moving at a slow pace until the month of July, when for the first time this year, completion crews outpaced drilling rigs.
“The average number of days to drill a well from spud to total depth remained steady at about 22. But the  average number of days from total depth to initial production fell from 94 to 79,” states Helms.
The reason for the overwhelming progress in well completions, according to Helms, had to predominately do with weather.
“A large number of frack crews sat idle in May and June due to the wet weather,” states Helms. “Once the summer weather arrived, the industry reacted to it and got busy completing wells.”
With the winter months soon arriving, Helms states that the Industrial Commission is busy helping operators plan for winter weather and the spring load restrictions that inevitably follow, by issuing a sufficient number of permits to accommodate multi-well pads through the end of load restrictions in 2014.
“Around the first of August, we start anticipating that the industry will not be able to do as much in the winter and spring months, so we issue a lot of permits to make sure we have enough drilling activity to get us through those slower times,” states Helms.
Helms and the Industrial Commission are also preparing for the potential slowdown that added hydraulic fracturing regulations may cause.
“Our goal is to have a sufficient permit inventory to get us through the end of load restrictions in 2014, as well as the time required to deal with hydraulic fracturing rules if required,” states Helms.
According to Helms, a new proposed rule was published in the federal register on May 24, 2013 regarding fracking on federal lands. Draft EPA guidelines for permitting hydraulic fracturing using diesel fuel was also published last  year.
The comment periods for both proposed guidelines recently ended, and because so much input was given to both rules, Helms expects the final guidance documents to be published by the end of the year.
Flaring was up two percent in July due to mechanical problems with a Oneok Gas Plant, as well as some pipeline issues. But it continues to raise a broader question for the Industrial Commission - how to bring flaring down to an acceptable amount, below five percent, without negatively impacting North Dakota’s economy or oil and natural gas production.
“Our projections have shown us that, at our current rate, we will not get below the five percent mark before the year 2021,” states Helms. “We are not satisfied with reaching five percent by 2021, because that is not acceptable. But we also know that our old laws and ways of decreasing flaring have not gotten us where we want to be either.”
Helms states that at this point, there does not seem to be an option that will not negatively impact the economy or production. But the Industrial Commission continues to search for a viable solution.