State officials expect temporary increase in oil production

FARGO, N.D. (AP) - North Dakota’s oil and gas production showed only a slight rise in June, although Department of Natural Resources officials said Friday they expect those numbers to improve in July and August, if only temporarily.

The department’s update showed that the state produced an average of about 890,000 barrels a day in June, up from about 860,000 barrels in April. Production had plunged about 30 percent in May, as oil companies idled wells and halted drilling plans after prices collapsed due to the coronavirus.

North Dakota Mineral Resources Director Lynn Helms said the department is “pretty confident” that the state topped 1 million barrels a day in July and that he expects similar results in August. However, he attributes that to “flush production,” or an increase due to curtailed wells coming back online.

The number of producing wells increased from 12,834 in May to 13,167 in June.

“We don’t want to get people too excited when next month we sit down and say, whoa, production’s up 300,000 barrels a day. That’s temporary. And the following month, production’s up 250,000 barrels a day. That’s temporary.” Helms said. “That’s that flush production, coming back from having restricted what we were doing. It’s kind of like falling off the diet wagon.”

Drilling is moving in the opposite direction, Helms said. The state had 12 drill rigs operating in June, down from 17 in May. There were 11 drill rigs operating in the state on Friday, and Helms said he wouldn’t be surprised if that moves into single digits as winter arrives.

North Dakota’s natural gas production slipped from 59.7 billion cubic feet in May to 59.2 billion cubic feet in June.

The industry was celebrating Thursday when the Environmental Protection Agency rolled back Obama administration rules rules designed to limit greenhouse gas emissions from oil and gas fields and pipelines.

“We appreciate the EPA’s work on updating these regulations to reduce the unnecessary burden they placed on our industry,” said Ron Ness., president of the North Dakota Petroleum Council. “In these past months we have been hit with a price collapse and decreased demand due to COVID, so getting relief from burdensome regulations will go a long way to help our industry recover.”