Helms Predicts Oil Will Stay 'Lower for Longer'

North Dakota's Department of Mineral Resources announced that the state's crude-oil production dropped in September to the lowest level in more than two years.

Related: Bakken Production Dips Below 1 Million Barrels a Day

Low crude prices are still wreaking havoc on the oil and  gas industry with North Dakota experiencing another drop in production, with volumes staying below the one-million-barrel-per-day mark for the second month in a row.

Crude production fell 1.1% on the month to 971,658 barrels a day in September, the lowest level since February 2014, when output was 952,055 barrels a day, and follows a 4.7% drop in August.

In a recent address to the North Dakota Association of Oil and Gas and Coal Producing Counties (NDAOGCPC), Director of Mineral Resources, Lynn Helms provided his forecast for future growth in western North Dakota. Helms estimates under that it is likely the price of West Texas Intermediate (WTI) will stay below $60 a barrel and rigs will continue to focus drilling in the four core counties of Dunn, McKenzie, Mountrail and Williams for the next ten years. Under his "lower for longer" scenario, well count reach a maximum of fifty-five thousand wells by 2050. 

Each year I look forward to providing this outlook to county leaders. Now that lower oil prices have held on for an extended period of time, I’ve included a “lower for longer” and a “price shock” forecast to give leaders an idea of how to plan for growth under suppressed drilling conditions as well as rapidly increased drilling activity.”
— Lynn Helms, Director of DMR

Read more at dmr.nd.gov

Total production in North Dakota was 29.2 million barrels of oil in September, down from 30.4 million barrels in August, the state said.

Natural-gas production in North Dakota fell 1.7% in September to 1.61 billion cubic feet a day, state figures showed. Energy producers burned off, or flared, 11.9% of gas output, up from 11.4% in August. Gas is a byproduct of oil production.

Most oil in North Dakota is extracted by hydraulic fracturing, or fracking, where a mixture of water, sand and chemicals is pumped into rock formations to push oil out. Such wells are first drilled and then put into production after being fracked, or completed.