Jan. Director's Cut: 'The most optimistic outlook we've had for a year or so'

Jan 16, 2018

ND Mineral Resources director Lynn Helms.
Credit Dave Thompson / Prairie Public

For his monthly "Director's Cut" production report -- which reflects November production -- state mineral resources director Lynn Helms was upbeat.

"(It's) probably the most optimistic outlook we've had in a year or so," Helms told reporters.

In November, the state produced 1,194, 120 barrels of oil a day. The state’s all time high was 1,227,483 a day. That record was set in December, 2014.

"Sometime in the first half of this year, we should break that record and start setting record production again," Helms said.

Helms said price is a big driver – it’s now up about $5 a barrel over the December price. He said oil companies are talking about adding another 5 to 10 drilling rigs. And Helms said those will likely go into Burke, Divide and Williams Counties.

"That's got to be exciting to those places," Helms said. "Divide County has been sitting at zero rigs for some months now. Once in a while, Burke County gets a rig."

But Helms said a downside to this is the number of inactive wells. 1492 wells are inactive, and that was up 21 from October to November. And another 800 are not completed.

"That is not the kind of number a regulator likes to see," Helms said.

Helms said a well can remain on inactive status for a year. After that, it needs to start production – or be plugged. He said waivers were granted when the oil price was down – but he said the current price doesn’t support that policy.

Also in November, North Dakota was capturing 86 percent of the natural gas produced by oil wells. That means 14 percent was flared. And the goal set by the state’s Industrial Commission was 85 percent capture.

However, state mineral resources director Lynn Helms said there is a problem with gas capture on the Fort Berthold Reservation. He said the Fort Berthold number was 75 percent capture, with 72 percent of gas produced on trust lands being captured. And he said somehow, the state needs to get the Department of the Interior’s attention on this, to get it fixed.

"It is a problem with pipeline rights-of-way," Helms said. "It is a problem with not being able to get air permits to build compression facilities on the reservation. It is just a problem all around."

Helms said he hopes to get US Interior Secretary Ryan Zinke' attention on how to get gas captuure on Indian lands improved.

"It's really under their control," Helms said.

By November first, the state has a goal of capturing 88 percent of the gas. Helms said that goal could be difficult to reach.