American Oil and Gas Reporter - November 2018 - 109

ConventionCoverage: North Dakota Petroleum Council

N.D. Oil Production Keeps Heading Up
FARGO, N.D.-North Dakota's oil production set a record in 2017, and Lynn
Helms, director of the state's Department
of Mineral Resources, said conventional
wisdom predicted a plateau for the following year. However, he told the North
Dakota Petroleum Council, new highs
continue, with July's production hitting
1.27 million barrels a day.
"In 2018, wells were 13 percent better
than they were in 2017, and much better
than wells drilled in 2009 and 2010," he
reported in his presentation at NDPC's
annual convention. "It's incredible how
much more oil you are extracting. Every
time we set an expectation for you, you
meet or exceed it."
North Dakota's well population sits
at 15,000, with almost 1,000 uncompleted
wells in the Bakken and Three Forks formations, Helms said. While the state
doesn't have enough fracture crews to
keep up with drilling operations, he added,
the industry's overall future looks bright.
"If you look at a $60-$80 price range
and a 60-70 rig range, we have between
21 and 71 years of drilling inventory.
That means a final well count between
40,000 and 85,000 wells," he calculated.
While the state's rig count is far below
2012 levels, Helms indicated improved

North Dakota continues its record oil
production, hitting 1.27 million barrels a
day, Lynn Helms, director of the state's
Department of Mineral Resources, says
in his update to the North Dakota Petroleum Council. He noted 2018 wells were
13 percent better than their 2017 counterparts, and much better than wells
drilled in 2009 and 2010.

rig efficiencies were more than compensating for that drop, with rigs now three
times as efficient as they were in 2012.
Those numbers are solid evidence that
the oil and gas industry is a job-creation
engine for North Dakota, Helms praised,
as ongoing employment increases provide
opportunities across the state and attract
workers and their families.
In other presentations at the Sept. 2526 event:
· Heather Ranck, international trade
specialist for the U.S. Commercial Service
at the Commerce Department, noted North
Dakota's soaring oil output came at a
good time, with its light sweet crude especially attractive to the international
markets now open because of the lifting
of the oil export prohibition.
· Katharine MacGregor, U.S. Department of Interior deputy chief of staff
for policy, argued the policies imposed
during the Obama administration demonstrated DOI's importance for domestic
energy and mineral production.
Regulatory Update
The state's rule for oil conditioning has
been in place for slightly more than three
years, and operators have collected 60,000
data points on its impacts, Helms said. At
the Industrial Commission's most recent
meeting, it voted to request comments on
proposed changes to the regulation. "We
are looking for feedback from the industry
and experts on organic chemistry to tell us
what should be in this order," Helms noted,
adding the commission anticipated issuing
changes by early October.
Changes to royalty statements and
spill reporting requirements also are in
the works, Helms advised. North Dakota
delayed its revised royalty statement regulations until July 1, 2019, anticipating
companies will need time to adjust their
computer systems to handle the new
check stubs and statements, and to allow
legislators an opportunity to adjust the
new requirements if necessary, he listed.
Six current royalty statements submitted
by North Dakota operators failed to meet
state requirements, Helms said, while
one revised statement did pass the 12 requirements contained in the new rule and
one other was under review with only
minor changes needed.
"I had an opportunity to speak to a
royalty management company last week,

a group of North Dakota farmers in Valley
City, who are large mineral owners and
royalty owners. They love the fact that
we are working on this, because they receive royalty statements from 50 operators
and there is no consistency whatsoever,"
he reported.
Operators currently have to deal with
what Helms called "a spider web of spill
reporting," with a host of agencies requiring
reports that often were duplicative and conflicted with one another. Following Governor
Doug Burgum's orders, North Dakota is
working on a unified, one-call spill reporting
system for protecting the environment,
Helms said. An operator would make one
call to an agency, he described, and that
office would take responsibility to notify
the proper officials, distribute the proper
spill reports and issue public reports.
"We will no longer have all these
press releases and websites announcing
spills," Helms said. He concluded, "If
we are not regulating in a way that allows
you to prosper and succeed, we want to
hear about it. Please contact us because
our goal is to see this industry prosper in
the state of North Dakota."
Oil Exports
The latest oil export data show the
United States doubled crude oil exports

Heather Ranck, international trade specialist for the U.S. Commerce Department's Commercial Service, tells the
North Dakota Petroleum Council's annual
meeting that data show the United States
doubled crude oil exports while liqueﬁed
natural gas exports increased 57 percent
year-over-year.

NOVEMBER 2018 109

American Oil and Gas Reporter - November 2018

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