oil and gas

"As flat as you can ever see."

That's how North Dakota Mineral Resources director Lynn Helms described October oil production numbers, compared with September.

In October production was at 1,222,871 barrels per day. The September number was 1,223,107 barrels per day. That's a difference of 236 barrels.

Helms said there are 15 drilling rigs working in the Williston Basin. He said permitting numbers have been up and down, depending on the price.

A program to plug and reclaim orphaned oil wells, using federal coronavirus relief funds, will continue through the end of the year.

The program uses money from the “Cares Act,” to employ crews who do the plugging and the reclamation of the land.  It was designed to keep some oilfield workers employed – so they could stay in North Dakota.

"We have employed people for over 105,000 man-hours of work," state mineral resources director Lynn Helms told the state Industrial Commission. "We spent $32.5 million on plugging and reclamation."

The Legislature’s Budget Section has okayed the repurposing of $16 million in CARES Act funding from a program to reclaim oil wells to paying for fracking crews.

The original budget was $66 million for the reclamation project.

State mineral resources director Lynn Helms told the Budget Section the plan was to frack up to 80 wells. And he said that could keep people employed in the oil industry in the Bakken.

North Dakota’s Industrial Commission could be filing a “friend of the court” brief in an appeal of a federal judge’s ruling that the Dakota Access Pipeline be shut down, while the Corps of Engineers completes an Environmental Impact Statement on the Pipeline.

The ruling says Energy Transfer Partners has a month to empty the pipeline. The company has appeals in motion to allow that pipeline to continue to operate.

The Commission chairman, Gov. Doug Burgum, said the state needs to show to the courts the economic harm that will come if the pipeline is shut down.

North Dakota’s Industrial Commission has approved the confiscation of some shut-in or orphaned oil wells.

The state will use money from the federal CARES Act to employ some in the Oil Patch, who lost their jobs because of a lower demand for oil,to plug and reclaim those wells.

"In this first phase, our best estimate is it will support about 550 full time jobs for six months," said North Dakota Mineral Resources director Lynn Helms. "And the second phase, the reclamation phase, would support somewhere around 600 full time jobs."

Gov. Doug Burgum thinks there’s a possibility that federal stimulus dollars could be used to help restart North Dakota’s oil industry, once demand rises and prices recover.

The state’s Industrial Commission – chaired by Burgum – met to look at what actions it could take, after oil prices went negative Monday. The Commission considered a 40-day emergency rule, to declare oil as waste, when the price goes south the way it did. But the Commission didn’t take any immediate action, and will wait to see what other oil-producing states and Canadian provinces propose.

The state’s Industrial Commission has agreed to re-establish an “inactive well waiver,” in light of very low oil prices.

Under current Commission policy, a well that becomes inactive must be put back into production or capped one year after becoming inactive.  It would also affect non-completed wells, which would become abandoned after one year.

The waiver would expire when the West Texas Intermediate oil price reached $50 a barrel. State mineral resources director Lynn Helms told the Commission that’s where the price was just before it collapsed.

Oil prices dropped after the bombshell announcement concerning Saudi Arabia and Russia.

The two countries could not come to any agreement on reducing production to shore up prices. And Saudi Arabia announced it would be ramping up production.

"Now it's back to every man for himself, in the world oil markets," said North Dakota Mineral Resources director Lynn Helms.

The monthly “Director’s Cut,” featuring December oil and gas production  numbers, was released on Valentine’s Day.

"Unfortunately, not a lot of candy and roses in the report," North Dakota Mineral Resources Director Lynn Helms told reporters. "It's a bit of a downer."

In December, the state produced 1,475,685 barrels of oil a day.  One month earlier, the state set a record for production -- 1,519,037 barrels a day.

"We saw about a 3 percent drop," Helms said.