North Dakota’s oil production may peak within five years, as companies finish drilling the most prolific parts of the state, state and industry officials told lawmakers this week, Kallanish Energy finds.
Mineral Resources director Lynn Helms, the state’s top oil regulator, said roughly 20% of drilling activity is now outside the “core” areas of the western North Dakota’s oil producing region, The Associated Press reported.
“The end of (core area drilling) is on the horizon; we can see it from here,” Helms told the state Legislature’s interim Government Finance Committee.
Though a typical well can have a lifespan of roughly three decades, the amount of oil that comes from it decreases by roughly half in the first two years, officials say.
Helms said the outlook now is for oil production to “plateau” for roughly 12 years after peak, then slowly decline by the end of the century to 1980 and 1990 levels of less than 150,000 barrels daily, AP reported.
The state is producing a near-record average of 1.5 million barrels per day (Mmbpd) of crude. Helms and North Dakota Petroleum Council president Ron Ness estimated production would peak at about 1.8 Mmbpd if prices hold. Both men said technology to enhance oil recovery could help stem some production losses, AP reported.
Oil is a key contributor to North Dakota’s economy, as the No. 2 producer in the U.S., behind Texas. North Dakota’s oil production is primarily from the Bakken shale and the Three Forks play below it.
Ness, whose group represents roughly 700 companies working in the state’s oil patch, reminded lawmakers oil production was only about 214,000 Bpd a day a decade ago, AP reported.
This post appeared first on Kallanish Energy News.