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Oil officials describe technological gains and steady production despite soft prices
Summary
The Department of Mineral Resources reported production slightly above forecast, operators increasing lateral lengths (3–4 mile laterals) and using new well shapes and incentives to sustain economics in a $58–$62 per-barrel environment; stripper wells now represent ~52% of wells and ~15% of production.
Nathan Anderson, director at the Department of Mineral Resources, told the Government Finance Committee that North Dakota oil production has remained relatively resilient despite softer oil prices, driven largely by operator innovation and longer lateral well designs.
Anderson said statewide oil volumes are slightly above forecast while prices track a bit below the forecasted tax price. ‘‘Volumes are slightly above forecast, prices slightly below,’’ he said, noting a compressed axis visual exaggerates the decline. He pointed to operational efficiencies—U‑shaped laterals, horseshoe and J‑shaped wells, and longer 3– and 4‑mile laterals—that have allowed companies to maintain output with fewer rigs and improved capital efficiency.
He said nearly 35% of recently permitted wells have laterals longer than three miles and that development incentive wells have been certified to encourage longer lateral designs. Anderson warned that spacing unit changes and longer laterals are expanding activity into northern and outlying counties and flagged inventory work being conducted by the geoscience team to update two‑mile equivalent inventories before the next legislative session.
On stripper wells, Anderson reported about 10,250 active stripper wells—roughly 52% of the state's well count and accounting for about 15% of production. He cautioned lawmakers against policy changes that could prematurely curtail low‑production wells, noting many wells take years to move into and through stripper status and still contribute taxes over their lower‑production life.
On prices Anderson said global oversupply is weighing on the market and he expects a $58–$62 band in the near term; however, he was more bullish on natural gas—driven by LNG export growth—forecasting increased activity in gas basins. He closed by saying he expects modest changes to rig and frac counts but not a material production decline at current activity and price levels.
Committee members asked about differentials, Permian comparisons, and timing of strip status; Anderson committed to follow-ups and additional data requests.
The committee received the briefing as informational.
