North Dakota’s natural gas production growth surpassed that of oil in April, reflecting rising gas-to-oil ratios (GOR) in the Bakken Shale formation, the state’s top oil and gas regulator said.
The Department of Mineral Resources’ (DMR) Lynn Helms, oil and gas division director, hosted his final monthly press briefing to discuss the state of exploration and production in the Peace Garden state. Helms is stepping down after a 26-year tenure at DMR during which the Bakken emerged as a leading source of oil and associated gas supply in the Lower 48.
“This is an incredible place to work,” a visibly emotional Helms told reporters. “And I can’t say enough about the way North Dakota has treated me and what a wonderful time it’s been working here for 26 years.”
Statewide natural gas production averaged 3.49 Bcf/d in April, up 3% versus March, DMR data show. Oil production, by contrast, rose by just 1% to 1.24 million b/d.
The rising share of associated gas produced with each barrel of oil is due to operators developing more so-called tier 2 and tier 3 acreage as the core Bakken acreage is depleted, Helms said.
Helms also said he expects the recently announced $22.5 billion merger of ConocoPhillips and Marathon Oil Corp. to bring “a lot of new ideas and new technologies” to the tier 2 and tier 3 areas.
Helms was joined at the press conference by director Justin Kringstad of the North Dakota Pipeline Authority. Kringstad said GOR ratios are at their highest levels since 2022. Regulators are “aggressively working on natural gas solutions” so that takeaway capacity can keep up with rising gas volumes, he said.
Kringstad also highlighted that preliminary work has begun on the 22,600 Dth/d Wahpeton Expansion project, which would serve gas demand in southeastern North Dakota. The project is slated to enter commercial service by the end of this year.
Kringstad also referenced a gas-to-liquids facility proposed for Trenton, ND, by Calgary-based Cerilon. The company said this month it is moving into front end engineering design for the project, “the last stage before we make a final investment decision” on it. The project, if completed, “would be North Dakota’s largest natural gas consumer” to date, he said.
The price of natural gas delivered to the Northern Border Pipeline system at Watford City, ND, stood at $2.16/Mcf as of Thursday (June 13) amid a gas supply glut in North America. Farther downstream on the same system, NGI’s Northern Border Ventura price averaged $2.070/MMBtu on Tuesday (June 18), up 15.0 cents on the day.
Kringstad noted that the heat content of natural gas on the Northern Border system is coming down slightly as producers are opting to capture and market more ethane instead of rejecting it into the gas stream. The trend should alleviate some pressure on the gas system, as gas with a higher Btu content can cause problems at the point of consumption for certain end users.
In the upstream segment, North Dakota’s rig count stood at 38 as of Thursday,, in line with monthly averages of 40, 38 and 37 in March, April and May, respectively, DMR data show.
Helms said the state’s five largest oil and gas producers have said cycle times for drilling horizontal wells have decreased by 10-15% since a year ago.
“That means that they’ve gone from eight or nine days to drill a two-mile lateral down to seven or eight days,” Helms explained. “So they’re drilling two-mile laterals in a week now.”
As a result, “they are anxious about what we’re going to do to make sure that we’ve got permits and that activity can continue to grow.”
The increased efficiency by producers supports projections that North Dakota will see oil production grow by 1-2% annually over the next 10-15 years, according to Helms. He also highlighted that DMR has now issued four permits for four-mile laterals. “That’s pretty groundbreaking,” he said. Three-mile laterals, meanwhile, account for about 70-75% of drilling permits in the state, Helms estimated.
DMR permitted 95 wells in May, which is on pace with the 90-100 permits needed monthly in order to grow production at the targeted 1-2% rate.
Well completions, however, only totaled 67 in May, according to preliminary data. “We need 90 to 100 for that production growth,” said Helms. “We’ve exhausted our supply” of drilled but uncompleted wells.
On the regulatory front, Helms said DMR has filed a lawsuit against the U.S. Bureau of Land Management’s recently finalized methane waste prevention rule meant to curb emissions from oil and gas leases on federal lands.
