1. Platts – North Dakota is the US’ No. 2 oil-producing state, having leapfrogged over Alaska in March and California a few months before that. And while North Dakota is not expected to vault ahead of No. 1 Texas anytime soon, the oil and natural gas boom that’s currently underway in the Roughrider State is promising to get even bigger in the coming years, according to a key state official.
Lynn Helms, the director of North Dakota’s mineral resources department, said on the “Platts Energy Week” television show Sunday that the Bakken Shale formation in the Western part of his state produced about 640,000 barrels of oil per day in May, second only to Texas’ 1.7 million b/d. But Helms emphasized that oil production in the Bakken is consistently increasing by 15,000 to 20,000 b/d every month, and that thousands of additional wells will be drilled there in the coming years.
“We’re seeing back-to-back 5% increases in production,” Helms said. “And we’ve got 35,000 wells left to drill in this Bakken reserve.”
Helms said it will take 16 to 18 more years to fully develop the Bakken Shale formation.
Helms said there are currently 210 drilling rigs working the Bakken, and that companies there are drilling nearly 3,000 new wells every year. For now, there is just one well in each “spacing unit,” he said. But that will change starting about 18 months from now, he said, when workers will begin drilling anywhere from 6 to 16 additional wells per spacing unit.
Helms noted that the Bakken Shale formation also contains a significant amount of gas. But he acknowledged that currently, a full 30% of the gas that’s being produced is being flared off at the wellhead because there are not enough gas-gas-gathering systems in Western North Dakota to capture it. He said the state and the energy industry are attempting to rectify that shortcoming by investing some $4 billion in gas-related infrastructure.
“We’ll be a big gas producer two decades from now,” he said, citing a state-funded study that found that the Bakken Shale “will be mostly gas production” for the final 15 years of its economically viable lifespan.
2. North Dakota collected almost $1.7 billion in oil tax revenue in the past fiscal year, nearly bringing in as much money in one year as the state expected to collect in two.
The original forecast from February 2011 predicted North Dakota would collect $2.041 billion in oil extraction and gross production taxes during the entire 2011-13 biennium.
The state is now on track to bring in between $3.5 billion and $4 billion, Tax Commissioner Cory Fong said Friday.