AMY R.SISK Bismarck Tribune
The golden days of Bakken seem to be over.
Oil companies have adopted a new term to describe the western North Dakota oil play: “mature”.
That’s the word the state’s director of mineral resources, Lynn Helms, heard repeatedly during a recent trip to a conference in Texas where he met with executives from 10 companies with wells in the Bakken. .
“The Bakken has been renamed whether we like it or not,” he told reporters on Monday. “We’re looking at very low growth rates, with some companies just keeping production flat.”
U.S. oil producers are more focused on growing their operations in the Permian Basin of Texas and New Mexico, he said.
Even soaring oil prices have not been enough to interest companies in significantly boosting their business in North Dakota. West Texas Intermediate crude, the US benchmark for oil prices, was trading at $95 a barrel on Monday, down from around $60 in December. Oil prices have risen dramatically in recent weeks, largely due to tensions between Ukraine and Russia, one of Europe’s main energy suppliers.
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“You would have expected activity to really pick up with this kind of oil price,” Helms said. “In renaming ourselves as ‘mature’, that’s not the plan.”
Another sign of change for Bakken’s outlook came in late 2021 when a new projected federal estimate that western North Dakota still contains 4.3 billion barrels of untapped recoverable oil, down 40% from the last estimate in 2013. The drop is partly due to 11,000 wells drilled in the past eight last years. State officials say much of the “core” area of the oil patch surrounding the town of Watford – where companies can get the most bang for their buck – has already been drilled.
While North Dakota could still see small increases in annual production, drilling is expected to decline in about a decade, Helms said.
To retain the state’s oil production, new technologies must be developed to extract more oil from rock where wells have already been drilled, a process known as enhanced oil recovery, he said. . So far, this is only possible in older vertical wells where carbon dioxide is injected to boost oil production.
Helms said the companies have attempted seven pilot projects in the state on new horizontal wells “with no success so far.” He added that “there appears to be significant interest”, but concerns about feasibility persist.
Meanwhile, many oil companies under pressure to operate in a more environmentally responsible manner have told him of their intention to increase the amount of natural gas they capture from wells to combat flaring. Flaring consists of burning excess gas. The process releases carbon dioxide, a greenhouse gas that contributes to climate change.
Data released Monday shows 93% of the gas was captured statewide in December, and the oil industry as a whole is meeting North Dakota’s 91% goal.
“We’re still going to have our work cut out from a state and industry perspective to meet the aggressive targets the operators are proposing,” North Dakota Pipeline Authority Director Justin Kringstad said.
More gas gathering, processing and transmission infrastructure will be needed, particularly if companies are looking at gas capture rates of 97% or more, he said.
Although the state has met its flaring target for several months, some problem areas remain. Only 46% of the gas produced on Fort Berthold Indian Reservation lands was captured in December. Fee land refers to private land within a reserve.
Helms said a gas processing plant near the reservation experienced downtime due to cold weather issues, just as a number of new wells started working. He expects the situation to improve as Outrigger Energy expands a gas pipeline that will harvest gas from the area and transport it to its Bill Sanderson Gas Processing Plant in Williams County.
North Dakota’s daily gas production fell 3% to 2.99 billion cubic feet in December. The state’s daily oil production fell 2% to 1.14 million barrels. The data is off by two months as the state collects data from the oil and gas industry. Helms attributed the declines to extremely cold weather that hit the state in late December. The oil slick tends to slow down in winter.