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Helms: Oil industry 'hanging in there'

For his monthly “Director’s Cut” oil and gas production update, state mineral resources director Lynn Helms picks a theme.

This month, the theme is “Hang in There.”

"I'm reminded of that poster from the 1970s, where the poor little frazzled cat is hanging on a rope, and appears to be just hanging on," said Helms.

Helms says that’s his analogy, based on the fundamentals of the oil industry. The report reflects July numbers.

"Oil production is essentially unchanged," said helms. "It's down less than one percent from June to July. Natural gas production was up less than a half-percent."

Helms says well numbers were up, but not dramatically.

"All of that in the face of oil prices that are down significantly," said Helms. "Permitting is down significantly, and rig count is down substantially."

Helsm says there are now 68 rigs working in North Dakota. The high was 218 in 2012.

But Helms says on the Fort Berthold reservation, the numbers were up for rig count, oil production and permitted wells.

"The tribal council's action to suspend a lot of the west segment rulemaking and activity was encouraging to industry, causing them to move back in," said Helms. "Also, it happens to be some of the best geology in the play."

While the percentage of natural gas being flared in the Bakken remained fairly constant in July, the volume was up. Helms says 20 percent of natural gas is being flared. That’s up 3 percent from June.

"A couple of infrastructure projects got delayed for a year, because of federal right-of-way problems," said Helms.

Those included the Lonesome Creek and Bear Creek plants, as well as a river crossing that would bring more gas to the Hess plant at Tioga. Helms says he’s hoping all will be on line during calendar 2016.

"If we get a good El Nino winter, with warm, dry weather, those things will come in on time, or maybe a little ahead of schedule," said Helms. "If we get a terrible North Dakota winter, it'll get worse."

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