North Dakota’s top oil and gas regulator attributed a larger than expected drop in the state’s oil and natural gas production to the Texas energy crisis that occurred in February.
The situation in Texas caused problems for the Southwest Power Pool, which in turn forced rolling blackouts for Western Area Power Association for two days. The situation contributed to an overall 6 percent drop in oil production from 1.083 million barrels per day from 1.147 million barrels per day in January — twice the amount that had been expected, according to North Dakota Department of Mineral Resources Director Lynn Helms.
Natural gas, meanwhile, dropped a similar percentage — 5 percent, going to 2.703 billion cubic feet per day from 2.849 billion cubic feet per day.
“Those (blackouts) impacted Williams, McKenzie and Divide counties,” Helms said. “So what we experienced, the best we can estimate is that Williams County saw about 3,000 barrels a day, monthly average, in terms of a drop because of the gas plant infrastructure shutdowns, as well as oil and gas wells.”
Mckenzie County dropped an average 9,000 barrels per day, and Dunn County about 5,000 barrels per day.
Some gas plants, such as Little Missouri 4, also volunteered to temporarily cease operations, in a bid to help the power companies out.
That contributed to gas capture rates dropping 2 percent, from 94 to 92 percent.
Production stats are 8 percent below revenue forecasts, Helms said, but prices in February were 4 percent above forecast, and 20 percent above on Thursday, April 15.
“That’s making up for any lost volumes,” Helms said, and the state won’t need to adjust its forecasts at this point.
Completions are tracking well with revenue forecasts, Helms said. There were 32 completions in February and 43 in March. The forecast is for between 30 and 40 between now and the first of July. That figure bumps to 40 to 50 in the second half of the year, and then 60 in the last six months of the 21/23 biennium.
Lawsuits loom on regulatory front
North Dakota might opt for litigation instead of comments when it comes to the Biden administration’s review of oil and gas leases on federal lands.
“There are already some lawsuits filed in terms of that moratorium and not doing the March lease sale,” Helms said. “What’s undecided is whether to join one of those lawsuits or for North Dakota to initiate its own.”
North Dakota had three tracts nominated in northwestern North Dakota for the March lease sale, which got pulled because of the moratorium, and there appears to be little to no prospects of a lease sale in June.
North Dakota will also be co-sponsoring with Texas a resolution at the Interstate Oil and Gas Compact opposing the Clean Futures Act.
“We are very encouraged by the action in the Senate and also the House of Representatives on Orphan Well funding,” Helms added.
That bill is being co-sponsored by Sen. Kevin Cramer.