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Oil production rebounds in August, but could shrink in October

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North Dakota's oil and gas production rebounded in August, as compared with July.

But there is a potential that production could be reduced in October.

North Dakota Mineral Resources Director Lynn Helms said in July, five natural gas processing plants were off-line, because of routine maintenance, and in one case, an expansion project. He said that recovered in August.

"Both oil production and natural gas were up 2.8 percent," Helms said. "That is encouraging."

Helms said natural gas flaring was again down to eight percent.

However, North Dakota’s Pipeline Authority Director says some disruptions with a natural gas pipeline in October could mean a ratcheting-back of oil production. Justin Kringstad said there are three maintenance events scheduled on the Northern Border pipeline this month, for work on compressor stations at Glen Ullin and St. Anthony, as well as one outside of the state.

"The system will not be fully shut-in, but it will have reduced flows out of North Dakota, averaging about 300 million cubic feet per day restrictions during those three events," Kringstad said.

Kringstad said each one of those events could likely have an impact of around 120,000 barrels of oil production reductions. He said that would be done so oil producers can stay within flaring limits.

"If you average that out, over the month, you're somewhere in the neighborhood of a 35,000 barrel per day challenge on average for the month of October," Kringstad said. And he said it could add up to about $7 million in lost oil tax revenue.

If operators are able to co-schedule other maintenance within the basin itself, that will assist and reduce that overall impact," Kringstad said.

Helms said he's also watching what OPEC-PLUS might be doing with its production.

"The (OPEC-PLUS) don't want to overheat the system,, and have shale drillers come on way too strong," Helms said. "I'm really anticipating some softening of oil prices in the near term, over the next four to six months."

Earlier this week, the North Dakota estimated oil price was $77.14 a barrel.