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North Dakota nat gas output up with prices

15 May 2017 17:50 (+01:00 GMT)
North Dakota nat gas output up with prices

Houston, 15 May (Argus) — North Dakota March natural gas output rose as higher prices incentivized higher gas capture, despite falling crude production.

Gas production in March increased to about 1.73 Bcf/d (49mn m³/d), 1.4pc higher from February, according to the North Dakota Department of Mineral Resources.

March crude production was down by about 8,600 b/d compared to the previous month to about 1.03mn b/d. Nearly all of the gas produced in North Dakota comes from the state's oil wells.

Higher gas production reflects "how much more significant natural gas production is becoming in terms of North Dakota revenue and production and operation," department director Lynn Helms said.

Gas production has been rising since hitting a 20-month low in December amid harsh winter conditions. Cold weather also increased gas flaring in December but has gradually declined with more mild weather.

Gas captured by North Dakota operators in March increased to 90pc, up from 89pc the month earlier and 86pc in December. Higher gas prices should also have incentivized producers to capture more gas.

Spot gas prices on the Northern Border pipeline at Ventura, Iowa, averaged $2.76/mmBtu in March, up by 62pc from a year earlier and 1pc higher than in February. Northern border can receive gas from North Dakota and deliver into major markets in the midcontinent, including Chicago.

The number of producing wells in North Dakota in March rose to an all-time high of 13,632. The estimated number of wells waiting on completion at the end of March was 689, down by 110 from the end of February and 920 in March 2016.

North Dakota today has 51 active drilling rigs, up by one from the end of April. The all-time high was 218 rigs in May 2012.