Oil & Gas: Key Insights from North Dakota’s May 2025 Director’s Cut

North Dakota’s Department of Mineral Resources delivered its May 2025 Director’s Cut, highlighting March production figures and key updates across the state’s energy sector. Below is a summary of the most important takeaways, from rising oil and gas output to shifting rig activity and infrastructure developments. The full presentation form Nathan Anderson and Justin Kringstad is included following the recap.

1. Production Snapshot (March 2025)

• Oil Production:
  • 36.99 million barrels in March (1.19 million barrels/day)
  • 2.4% increase from February
  • 8.5% above revenue forecast
• Natural Gas Production:
  • 106.66 BCF total, up 5.15% from February
  • Rebound expected after February’s extreme cold

2. Rig Count & Operations

• North Dakota Rig Count:
  • 31 active rigs (down 1 from April)
  • Williston Basin total: 33
  • U.S. rig count is softening due to volatile pricing
• Operators Expect to Drop Rigs:
  • 4–5 operators plan to drop rigs
  • Estimated 2 frack crews may also drop
  • Impacts likely between now and August
• Well Activity:
  • Completed wells down in April (road restrictions)
  • May shows early rebound
  • 913 three-mile laterals and 46 four-mile laterals permitted
  • 14 U-shaped laterals permitted (2 online)

3. Pricing Trends

• Oil Prices:
  • March ND price: $60.68/barrel (13.3% below forecast)
  • Current WTI: ~$62
  • Clearbrook back to a premium over WTI
• Gas Prices:
  • Henry Hub ~$3.35
  • Price volatility continues to influence activity
• Netback (ND vs. WTI):
  • ND barrels averaged $7.39 below WTI in March

4. Gas Capture & Flaring

• Gas Capture Rates:
  • Statewide: 95.4%
  • Bakken: 95.8%
  • Flaring volume dropped by 21 million cf/day
  • Only 3rd month on record with 4% or lower flaring
• Improvements:
  • Capture gains from sites already connected (congested systems being improved with looping, compression)

5. Legislative & Policy Updates

• Pipeline Authority Funding:
  • Increased from $30M to $50M/year to support pipeline capacity purchases
  • Aims to de-risk infrastructure for private investment
• Non-Bakken Drilling Incentives (HB 1483):
  • Tax incentives for initial production from non-Bakken wells
  • Some early operator interest reported
• Non-Completion Waiver Considered:
  • Would allow operators to delay completing drilled wells
  • Goal: retain rig activity during low price periods
  • Downside: delayed state tax revenue

6. Crude & Gas Transport Trends

• Rail vs. Pipeline:
  • ~30,000 barrels/day shifted to rail in March
  • Pacific Northwest (PAD 5) showed stronger pricing, attracting Bakken barrels
• Storage Expansion:
  • Baker Storage Field project open season underway (adds 10 BCF of storage)
  • Aims to resolve longstanding connectivity limitations