Wildfires Curtail North Dakota Oil Production

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--An active wildfire season in the Northern Plains curtailed more than a half million barrels of crude oil production in October, a North Dakota regulator said.

North Dakota is home to the Bakken Shale formation, among the most lucrative inland basins in the country. Federal estimates show Bakken production accounting for about 10% of the total U.S. inland oil production.

Production hit an all-time high in November 2019 at 1.5 million barrels per day (BBL/d). Year-over-year gains in shale oil production are decreasing, though operators have managed to do more with less by using multi-bore wells and longer laterals.

Mark Bohrer, the assistant director of the oil and gas division at the North Dakota Department of Mineral Resources, said total production for October was curtailed by around 520,000 barrels for the month as operators shut down to avoid wildfire damage.

"The (fall in production) figure is significant," he was quoted by the Reuters news service as saying Wednesday. The regulator previously estimated that fires would shut in as much as 90,000 barrels per day due to the blazes.

North Dakota production topped out this year at around 1.24 million BBL/d in April. For October, state data show production was closer to 1.17 million BBL/d.

It's been a volatile year for weather. Wildfire season across the Rocky Mountain range and into southern Canada got off to an early start this year, with authorities in oil-rich Alberta advising residents to prepare emergency kits ahead of blazes near Wood Buffalo in April.

Coupled with low refining margins and a lower-for-longer outlook for the price of crude oil, companies working in the Bakken are taking a beating. Among the more active companies in the Bakken, Continental Resources Incorporated (Oklahoma City, Oklahoma) reported total revenues of $1.7 billion for the third quarter, down 18% from the prior period. North Dakota regulators, however, remain upbeat on future trends. In its Director's Cut for December, published Wednesday, the North Dakota Department of Mineral Resources said upstream activity is steady, but should increase gradually over the next two years.

The Energy Information Administration (EIA), the statistical arm of the U.S. Energy Department, estimates total Bakken crude oil production will average 1.15 million BBL/d this year, and grow to 1.18 million BBL/d on average for 2025.

The state is only a marginal gas producer relative to other basins, such as Appalachia in West Virginia and Pennsylvania. North Dakota, however, captured about 95% of the gas in the Bakken in October.

EIA data show the Bakken will be the lowest inland natural gas producer among the seven primary shale basins with an average of 3.2 billion cubic feet per day (Bcf/d) expected this year and in 2025. That compares with Appalachia, with an estimated 35 Bcf/d next year.

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