Despite low crude oil prices, North Dakota oil producers are racing to get ahead of a possible moratorium on drilling that could be imposed by the Biden Administration on federal lands.
“There is a fear of a federal policy that would create the inability to get a federal drilling permit,” said Lynn Helms, director of the ND Dept. of Mineral Resources. “That is why we are seeing more drilling permits (now).”
About 48% of all the 7,000 spacing units in the state contain some federal ownership and “about one fourth of those would be seriously impacted by a moratorium”, Helms said.
Federal agency ownership includes the US Forest Service, Indian reservation lands, Bureau of Land Management and US Army Corps of Engineers. NDMR issued 74 drilling permits in October, 51 in September and 47 in August. There are now 280 approved permits on the Fort Berthold Reservation
There are 14 drilling rigs working in the state as the NDMR reported a 5% jump in oil production in September as it reached over 1,221,667 BOPD.
That was largely attributed to operators opening up shut in wells. About 60,000 BOPD remain shut in as operators completed 43 new wells in September. Helms said between 60 and 70 new wells are need each month to offset the normal declines in current production.
With current oil prices in the state running at $33.25 a barrel, Helms said more activity would occur when prices move past $45 a barrel and stay around $55 a barrel. He said most projections indicate that higher oil prices at that level will not happen until 2022.