Winter Weather Causes 4.2 Percent Drop In January Oil Production

BISMARCK – A winter storm and subzero temperatures contributed to a 4.2 percent drop in North Dakota’s oil production in January, the Department of Mineral Resources said Friday.

The state produced an average of 738,022 barrels per day in January, according to preliminary figures from the department, down from the record high of 770,111 barrels per day produced in December.

“That is a very significant drop in production,” said Lynn Helms, director of the Department of Mineral Resources.

Helms said he anticipates that the state’s monthly oil production numbers will continue to go up and down through May. February was a strong month, but recent winter storms will likely mean a drop in March production, Helms said.

The month of May will bring spring road restrictions that in some counties may severely restrict truck transportation, Helms said.

Starting in June, North Dakota should again see consistent increases in monthly oil production, Helms said.

North Dakota also saw a production decline in November, in part due to winter weather.

The state’s budget revenue forecast is built around an average daily production of 830,000 barrels a day starting in July, hitting 850,000 barrels a day at the end of 2014 and holding steady through the end of the 2013-15 biennium.

Helms said he expects the production will meet those projections and will likely exceed them if the drilling rig count remains as high as it is now, which is 188.

Flaring of natural gas was at 29 percent for January, up slightly from 28.5 percent in December.

Justin Kringstad, director of the North Dakota Pipeline Authority, recently examined why the gas is being flared, looking for ways to lower that percentage.

A lack of pipelines is attributed for 16 percent of the flaring, a figure that is higher for counties on the fringe of the Williston Basin, Kringstad said.

The remaining 13 percent of natural gas that is flared is because of challenges on existing infrastructure. For example, one extraordinarily high-producing well in McKenzie County that Helms calls “sort of a bully” has such strong pressure that it keeps natural gas from neighboring wells from flowing into the pipeline system that they share. That forces those wells to flare off the gas.

Kringstad said possible solutions include adding compressor stations or adding a loop or parallel gathering line.

Frequent cleaning of pipelines may also reduce flaring, Kringstad said. Natural gas liquids can build up and pool at the bottom of the pipeline, particularly in winter months.

“We need every inch of that pipeline to move the gas,” Kringstad said.

Flaring has been trending downward from a high of 36 percent in September 2011, but it’s been stuck around 29 percent for the past three months. Helms said the goal is to get it to about 5 percent.

Helms said he’s excited about an innovative drilling proposal from the Bakken Hunter company that arranges oil wells to line up with a gas gathering system to make it easier to capture the natural gas rather than flare.

“We’re frustrated and we want to keep making progress on that,” Helms said. “This is the type of thing that really will be a step change.”