North Dakota oil production sets more records, but limited by gas capture
BISMARCK—North Dakota continued to set oil and gas production records in August, reaching nearly 1.3 million barrels per day, the Department of Mineral Resources said Friday.
It was the first time North Dakota produced 40 million barrels in one month, said Lynn Helms, the department's director.
The state also hit a natural gas production record with more than 2.4 billion cubic feet per day, according to the preliminary figures.
The industry captured 83 percent of Bakken natural gas in August, missing the state's natural gas capture target of 85 percent for the fourth month in a row. The volume of natural gas flared statewide was 431 million cubic feet per day.
Flaring continues to be highest at Fort Berthold, where operators captured 73 percent of the natural gas, or flared 27 percent.
North Dakota's gas production exceeds the state's natural gas processing capacity. The Oasis Wild Basin II plant, which will begin operating in November, will immediately have an impact on reducing flaring, said Justin Kringstad, director of the North Dakota Pipeline Authority.
But the state won't be caught up on processing capacity until next year, Kringstad said. The next gas plant scheduled to come online is the Little Missouri Four Plant. When announced, that project was expected to come online this year, but workforce shortages pushed that completion back to the second quarter of 2019, Helms said.
Meanwhile, the gas capture target is set to become more aggressive in November, increasing to 88 percent. Helms said he recently met with two companies that have "serious doubts" about achieving that goal.
"They're pulling out all the stops and looking for every option," Helms said.
The North Dakota Industrial Commission is expected to have a "robust discussion" about the gas capture policy at its Oct. 25 meeting, Helms said.
It continues to be rare for regulators to impose oil production restrictions for companies that miss the gas capture target. Twelve companies captured less than 85 percent of Bakken natural gas in July. None were ordered to restrict oil production under the state's policy.
Helms said two companies were close to being required to restrict oil production, but they were able to provide written documentation that the flaring was due to unforeseeable circumstances.
Some companies voluntarily restrict oil production in order to meet the gas capture targets. Helms said he has no way to accurately measure the self-imposed restrictions, but he estimates it to be about 50,000 barrels per day based on his conversations with the top 10 Bakken producers.
"There is a lot of restraint being exercised by the oil and gas operators," Helms said. "The last thing they want is an order from the Industrial Commission telling them how much production to restrict where."