Oil production in North Dakota will likely be flat or lower in September because of heavy rains. But in August, the state set another record.
Heavy September rains will put damper on oil production momentum in North Dakota
Prices are the only weak point, officials say, as they express optimism for fall.
October 17, 2019 at 11:13PM
"In most respects, we set new records everywhere," Lynn Helms, director of the North Dakota Department of Mineral Resources, said Tuesday on a conference call discussing August results.
Helms said the October snowstorms did not affect oil production as much, so he expects to see records in oil and gas production again in either October or November.
North Dakota, the second-largest oil-producing state after Texas, produced 1.48 million barrels of oil per day in August, a hike of 2.5% over July.
Natural gas production rose 2% over July to 3.01 million MCF. An MCF is 1,000 cubic feet of gas.
The state's rig count — an indicator of drilling for new wells — is still healthy for the time of year. There are now 60 rigs, down from 62 in August.
Natural gas production, Helms said, is at capacity, and if the state had more infrastructure, numbers would be higher.
The industry, he said, has done a better job at controlling flaring, which is the burning of excess natural gas. The rate has been above the state's target much of the year.
In August, the capture rate was better, at 81%, up from 77% in July. But it still did not meet the state's 88% goal.
The federal government's weekly report showed Brent crude, the international oil price, at $59.91. West Texas Intermediate — the benchmark U.S. crude price — was at $53.93 Thursday. The WTI benchmark was at $73 last October.
This year, the price has stayed in the $50s, Helms said, because of market conditions. The European economy and Chinese manufacturing are both weaker with uncertainty over Brexit and the U.S. trade tariffs.
The federal report Thursday said as a positive, the industry tapped into gasoline stores, lowering inventory. But crude-oil inventories rose because refinery output was at 83.1%, the lowest it has been since Hurricane Harvey hit in 2017, Reuters reported.
The low oil prices have hit oil companies, some of which have announced U.S. layoffs as a result. Whiting Petroleum, which is based in Denver but focuses much of its activity in North Dakota, announced in the summer it would lay off about 250 employees, amounting to one-third of its workforce.
Oilfield-services provider Halliburton earlier this month announced it would cut 650 U.S. jobs as weak oil prices have drilling companies putting off investments.
Helms said North Dakota lost Halliburton jobs only in the "low single digits" at the company's Dickinson operation.
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