North Dakota oil and gas output rose 2.8% in August, while high crude oil prices could bode well for future production.
"I am happy to report that both crude oil and natural gas production recovered from July," Lynn Helms, North Dakota's mineral resources director, told reporters in a conference call Wednesday.
He noted that July oil and gas production was dampened by maintenance outages at several gas processing plants. (Limitations in gas processing can also affect oil production).
North Dakota churned out 1.11 million barrels of crude per day in August, up from 1.08 million the month before, according to state data released Wednesday.
During the same period, natural gas production rose from 2.88 million MCF per day to 2.96 million. An MCF is 1,000 cubic feet of natural gas.
The number of oil drilling rigs in North Dakota increase from 23 in July to 28 in August and stands at 30 today. The drill rig count is an indicator of new production.
"There was good news on the rig count," Helms said. "There is good news on the oil price front — prices are very, very strong."
U.S. oil prices crossed the $80 per barrel mark this week for the first time since 2014. U.S. natural gas prices are at sustained levels not seen in years, while global gas prices have skyrocketed on shortages.
Oil prices at $80 a barrel — if they hold — "are definitely strong enough to shift capital to the Bakken," Helms said.
Still, shale oil companies in the United States have been much more disciplined this year about capital investment than in the past, when willy-nilly growth hurt profits.
And while high oil and natural gas prices will help North Dakota — taxes on the industry help fuel the state's budget — they're not good news for U.S. consumers already facing inflation for many goods.
