North Dakota's August Oil Production Increases,/Disappoints | Russell T. Rudy Energy LLC
“Rigzone” reports that although oil production hit a new high of 1.13 million barrels per day (bopd) in August, this was only a slight increase over July levels and below expectations. The shortfall has been attributed to new flaring regulations, falling prices, and rising operating costs.
Flaring has long been an issue in the Prairie State, and operators diverted attention from expanding production to connecting wells to natural gas processing equipment. New state mandated regulations provide for stiff penalties if monthly flaring goals are not met. This has, and will probably continue to have, a negative effect in the growth of oil production.
While some parts of the Bakken shale in North Dakota are profitable at current, or somewhat lower, oil prices, other areas are already considered marginal economically. If oil prices continue to drop, future drilling plans will be revised downward in the state.
State regulators also attribute part of the lower growth rate for oil production to rising operating costs associated with increasing levels of produced water that has to be separated, treated and disposed of.
To read the article in its entirety, please go to www.rigzone.com/news/oil_gas/a/135457/Flaring .
