Oil output up again but flaring percentage drops
BISMARCK -- Oil and gas production in North Dakota continued setting records in July, with oil up 18,000 barrels a day from June and a 3 percent increase in gas production.
BISMARCK - Oil and gas production in North Dakota continued setting records in July, with oil up 18,000 barrels a day from June and a 3 percent increase in gas production.
The preliminary oil production figure for July is just over 1.1 million barrels per day, according to figures released Friday by the state.
The big news, according to North Dakota Director of Mineral Resources Lynn Helms, was 74 percent of the natural gas was captured, decreasing the amount flared to 26 percent.
That percentage meets a requirement the state Industrial Commission said must be reached by October, but maintaining that level of gas capture will be a challenge, Helms said.
“With the increase in drilling activity though, industry is going to have to work hard to maintain that going into that October goal and requirement from our gas capture order that was issued in July, which sets an absolute requirement that industry be at 74 percent capture in the month of October,” he said.
The percentage of gas flared dropped to 26 percent even though the new Hess gas processing plant at Tioga remained below full capacity - only 70 percent - due to delayed expansion of gas gathering from south of Lake Sakakawea.
Helms said the plant is on its third version of a cultural study for a permit for a half-mile stretch of federal land needed for the pipeline, delaying construction until 2015.
He called it a “major disappointment,” saying it would hold the plant at 70-75 percent of capacity through the winter.
“That’s going to make it harder to reach that gas capture goal, keeping in mind January’s goal ramps up to 77 percent capture,” he said.
In addition to the rig count increase to nearly 200, permitting counts increased as well. Helms said drillers are significantly outpacing the completions, with barely a chance to catch up.
He said the juncture where Dunn, McKenzie, Mountrail and Williams counties meet is the best place on the North American continent to make money.
Helms said the Bakken’s real issue continues to be flaring. One year ago Thursday, Gov. Jack Dalrymple addressed the industry and urged the issue be addressed, he noted.
“It looks like what we’re doing is working. … Here we are a year later with rules in place and gas capture plans in place. We were at 36 percent on that date. We’re at 26 percent flaring today,” Helms said.
If flaring goals aren’t met, companies could face production restrictions or daily fines.