Sept 12 (Reuters) – North Dakota’s daily oil production jumped 5 percent in July to an all-time high, though the number was lower than expected as producers worked to meet aggressive flaring-reduction targets, state regulators said on Friday.
The production numbers, which have been steadily rising for years, highlight the massive investments Hess Corp, Whiting Petroleum Corp and other companies are making to develop the state’s oil-rich Bakken and Three Forks shale formations and others.
Despite the positive production data, shares of top North Dakota oil producers fell with the broader market.
The investments have brought thousands of new workers to North Dakota, as well as billions in infrastructure and real estate investment, making the state the fastest-growing economy in the United States.
North Dakota’s oil wells produced 34.4 million barrels in July, up from 32.8 million barrels in June, the North Dakota Department of Mineral Resources said. That averaged 1.1 million barrels a day.
Natural gas production in the state hit 1.3 billion cubic feet per day, also an all-time high. The percentage of natural gas flared in the state fell to 26 percent in July from 30 percent in June.
In an effort to curb flaring, the wasteful burning of natural gas, state regulators issued strict goals earlier this year with key benchmarks for flaring percentages each month. For Oct. 1, for instance, the state’s oil producers cannot flare more than 74 percent of natural gas produced. If they do, they face fines.
The industry has effectively reached that goal, but it did so by posting a jump in July oil production that was only about half what had been expected, Lynn Helms, the director of the state Department of Mineral Resources, said in a presentation to reporters.
“The industry is taking this dead serious,” Helms said of the flaring goal.
The number of rigs operating in the state as of Friday stood at 198, up from 193 in August but 9 percent below the all-time high, according to state data.
“The industry understands that there is no better place to make money than the core of the Bakken and Three Forks formations” in North Dakota, Helms said.
Helms vowed to keep drilling permit approvals going in order to continue development, though he acknowledged that oilfield service companies are having a hard time completing wells due to the speed at which drilling is occurring.
Shares of top Bakken oil producers fell across the board on Friday along with the broader stock market.
Shares of Continental Resources Inc fell the most after the company, the largest North Dakota oil company, said its president had quit. The stock was down $1.93, or 2.5 percent, at $73.86 a share on the New York Stock Exchange.