Oil wells transfer to new Bakken operators

Oct 10, 2017

Pumpjacks extract oil in western North Dakota.
Credit Amy Sisk / Prairie Public

North Dakota officials have noticed an uptick in the number of oil wells transferring ownership in the Bakken.

Nearly 700 wells are in the process of being transferred from longtime North Dakota operators to new ones, mineral resources director Lynn Helms said Tuesday in his department’s monthly oil and gas briefing.That number’s unusual given that, recently, only 100 wells were transferred in a typical month.

“Companies have re-evaluated their business model and decided to focus on an area where they’re having greater success,”  Helms said.

For some, that means the oilfields in Texas. For others, different rock formations still in North Dakota.

Many of their former wells are located on the Fort Berthold Indian Reservation.

Fort Berthold operators are facing a problem with flaring excess natural gas. Flaring has spiked in recent months due to temporary shutdowns of a pipeline and a processing plant, though Helms said those delays have passed.

Helms said flaring could persist due to a lengthy Bureau of Indian Affairs’ permitting process for new pipelines.

This all poses a challenge for these Bakken newcomers.

“On top of being new operators, they’re acquiring wells that are having gas capturing problems, and that’s going to make it more difficult for us,” he said. “You’re going to have to find new technology or really struggle.”

Overall in North Dakota, oil production is up slightly to 1,085,000 barrels per day, the most recent figures from August. This is the first month in nearly a year that oil has climbed more than natural gas production.

Helms said he think it has to do with the Bakken’s sweet spot -- the area around Watford City where oil producers can get the most bang for their buck. This happens to be where there’s the most natural gas that comes to the earth’s surface alongside oil.

“We now have 10 rigs that are working on the edge or outside the core area,” he said.

Those rigs are located further out into Williams and McKenzie counties, and even into Billings County, where he says it’s simply less gassy.