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DMR: production steady, long laterals and pipelines shaping flaring and revenues
Summary
DMR reported oil slightly above forecast but prices below, noted growth in longer lateral drilling and emerging on‑site gas uses, and said pipelines would reduce flaring where available though expansion may outpace build‑out.
Nathan Anderson, director of the Department of Mineral Resources, told the committee North Dakota oil volumes are roughly on forecast and gas volumes are slightly increasing while prices remain 'soft.' Anderson said production growth has been supported by operator innovation: longer laterals and u‑shaped well designs have increased capital efficiency and pushed average lateral lengths higher.
Why it matters: Production volumes, prices and capture rates directly affect state oil and gas tax collections and the timing of when funds flow into the general fund and other statutory buckets.
Anderson said capture rates are roughly 90–95% and estimated flared volumes around 4% (about 250 million standard cubic feet per day). He gave a field example of an operator using an on‑site crypto mining operation that consumes about 2,000,000 scf/day that otherwise might have been flared. On pipeline capacity, Anderson said the chart represented about 3.5 Bcf/day and that a 30–36 inch pipeline could carry a large portion of that, with staggered offtakes used in practice.
On stripper wells, Anderson explained the certification flowchart and said about 10,250 active wells have stripper status (≈8,900 Bakken/3‑Forks), and that stripper wells account for about 15% of state production. He reminded the committee that a prior bill (1483) directed a study to the Tax Reform and Relief Advisory Committee on stripper well policy.
Anderson reviewed world oil production and EIA forecasts and said a projected 2,000,000 barrel daily oversupply supports a near‑term $55–$60 oil price band; he said natural gas prices are stronger (around $5/MCF) because of recent LNG export capacity coming online.
Committee members asked technical questions about unit conversions (BCF vs. dekatherms), inventories of small on‑site utilization projects, and whether an eastern pipeline at full capacity would substantially reduce flaring; Anderson said pipelines help where they exist but field expansion can outpace pipeline construction so some flaring may persist until infrastructure catches up.
The committee did not take formal votes on the technical or policy items in Anderson’s presentation; legislators requested follow‑up materials on unit conversions, inventories of small utilizations, and the background memo on the stripper well study.
