Bravera Bank
North Dakota's energy sector has long been a cornerstone of the state's economy, with oil production serving as a significant contributor.
Currently, the state produces approximately 1.17 million barrels of oil per day, primarily sourced from the Bakken and Three Forks formations, which together account for over 97% of the total output. Although this figure shows a modest decline from earlier in the year, production levels remain stable and consistent with long-term expectations. The key counties in this production landscape, McKenzie, Dunn, Mountrail and Williams, continue to play vital roles in supporting the state's oil output.
In conjunction with oil production, North Dakota's natural gas sector is also on the rise, with output surpassing 3.47 billion cubic feet per day. This increase is attributed to new drilling activities and improved gas-to-oil ratios in aging wells, leading to an impressive gas capture rate of approximately 96%. This high capture rate highlights ongoing improvements in infrastructure and adherence to regulatory targets aimed at optimizing resource recovery while minimizing waste.
Infrastructure Expansion for Future Capacity
To further enhance its natural gas capabilities, North Dakota is advancing two major pipeline projects designed to alleviate takeaway limitations. The Intensity Infrastructure and Rainbow Energy Pipeline, which spans 344 miles from Watford City to Casselton, aim to support expanded production, reduce flaring, and meet growing local demand. With a capacity of up to 1.5 billion cubic feet per day and a targeted in-service date of July 2029, these projects are set to play a crucial role in unlocking additional production capacity. Additionally, the WBI Energy proposal, which follows a similar west-to-east corridor and offers a capacity of up to 1.1 billion cubic feet per day, is currently under review by the North Dakota Industrial Commission.
Innovation in Drilling and Sustainable Development
As North Dakota's oil production matures, the drilling landscape in the Bakken has evolved from a focus on the number of wells to how deeply operators are drilling beneath the surface. By 2025, advancements in technology and well design are expected to enable operators to extend lateral drilling from the traditional 2-mile length to 3 or even 4 miles. This shift represents a new strategy aimed at maximizing recovery, minimizing surface impact, and modernizing metrics. Historically, North Dakota’s shale wells utilized 2-mile laterals, yielding solid returns. However, companies like Chord Energy and Hess Corporation are demonstrating that longer laterals can result in better outcomes. Hess recently completed the state’s first 4-mile laterals, while Chord has three in operation and seven more in development.
These projects not only reflect engineering progress but also drive economic and environmental benefits. The advantage of super-laterals lies in economies of scale; with only 40% to 60% more investment, companies can achieve nearly double the estimated ultimate recovery compared to 2-mile wells. This approach reduces the production footprint, leading to less disruption for landowners and decreased operational costs. Longer laterals also enhance reservoir access, minimizing the need for additional drilling. This shift in drilling practices has transformed how the industry measures development, now emphasizing linear wellbore footage as a better indicator of resource access. A rig drilling one 4-mile lateral achieves the same wellbore footage as two 2-mile wells, but with less environmental impact and potentially greater returns.
These advancements align with North Dakota's long-term energy strategy of producing more with less. Whether used in conjunction with carbon dioxide injection for Enhanced Oil Recovery (EOR) or integrated into existing infrastructure, extended-reach laterals are shaping a more efficient and sustainable future for the Bakken. While the state may not be in its early boom phase, it is demonstrating that maturity can lead to improvement rather than decline.
Carbon Management and Enhanced Oil Recovery
In an era where environmental considerations are paramount, North Dakota is emerging as a leader in carbon capture and storage (CCS). The state's exceptional subsurface geology, combined with progressive regulations, positions it favorably for CCS initiatives. Notable projects include Red Trail Energy in Richardton, which captures 180,000 metric tons of CO₂ annually from ethanol production and Blue Flint Ethanol in Underwood, part of Harvestone's expanding carbon storage operations.
Furthermore, Project Tundra represents a major endeavor targeting the capture of 4 million metric tons of CO₂ annually from coal-fired generation. As North Dakota's legacy Bakken wells experience a natural decline in production, operators are exploring enhanced oil recovery (EOR) through CO₂ injection. This method increases reservoir pressure and mixes with oil to reduce viscosity, making extraction more efficient, while also contributing to environmental goals by lowering the carbon intensity of oil production. Studies from universities and state agencies estimate that CO₂-EOR could yield an additional 5 to 8 billion barrels of oil recovery statewide, underscoring its economic potential.
Article written by Russ Murphy, CMM, CTFA, Senior Wealth Advisor and Mineral & Estate Specialist.
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