North Dakota's oil production unexpectedly fell 2.5% in July due to a dearth of new wells coming online.
"It was a surprise to myself and to my staff," Lynn Helms, North Dakota's mineral resources director, told reporters Thursday. "We were anticipating a slight increase."
North Dakota, the nation's third largest oil-producing state, pumped out 1.07 million barrels per day in July, down from 1.1 million the previous month. Natural gas production, however, increased 1.3% to 3.1 million MCF. (An MCF is 1,000 cubic feet of natural gas.)
Helms said the oil decline stemmed from "very low well completions" in June. The number of completed wells jumped in late July, but not enough to bring production up to expected levels, he said.
The number of drilling rigs in North Dakota — a harbinger of future production — currently stands at 45, down one from August and even with July.
"Rig count has pretty much stalled out in the mid-40s," Helms said. "We are just not able to attract the skilled labor we need to drill more wells and deploy more frack crews."
Fracking entails blasting a torrent of water, sand and chemicals underground to free up oil in shale rock.
North Dakota's gas production rose — even though oil fell — as the gas-to-oil ratio from wells continues to increase. As oil fields age, that ratio climbs.
The state set a volume record in July for natural gas that was "captured" and sold. Gas that isn't captured is burned off, a process that wastes resources and emits carbon dioxide.
North Dakota oilfield operators captured 94% of all gas produced during July; only 6% was flared. The state has had a historically high gas capture rate of 93% to 94% for the past 10 months.
