North Dakota Oil Production Remains Steady Amid Price Declines

North Dakota's oil production has demonstrated resilience despite declining prices, with the state producing nearly 1.17 million barrels per day as of October 2025. Nathan Anderson, the director of the North Dakota Department of Mineral Resources, noted that while the average price of North Dakota crude oil fell to approximately $53 per barrel—down $14 since January—production levels have remained stable. This stability is attributed to advancements in drilling technology that allow companies to maintain profitability even at lower price points.

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A significant factor contributing to North Dakota's steady oil output is the adoption of longer horizontal drilling techniques. Traditionally, wells in the Bakken formation were drilled vertically for about 2 miles before curving horizontally. However, companies have begun drilling horizontally for up to 3 miles, with over 1,000 permits issued for these longer wells, which now account for 30% of all completed wells. In 2024, some companies have even started drilling for 4 miles, with 105 permits awarded, one-fifth of which have been completed. These innovations have made it economically viable to explore areas outside the Bakken core, leading to increased activity in regions such as Divide County, Burke County, and southern McKenzie County.

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The economic viability of longer wells is underscored by their quicker return on investment. Typical Bakken wells reach the 200,000-barrel production milestone in about 46 months, while 3-mile wells achieve this in just 22 months. Notably, a 4-mile well analyzed in northern Mountrail County reached this milestone in only eight months. Governor Kelly Armstrong emphasized that faster payoffs enable companies to reinvest in additional drilling locations, addressing cash flow challenges.

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The increased value of these longer wells was reflected in the state's highest-grossing auction of oil and gas rights in 14 years, which raised $49.5 million for 64,000 acres in October 2025. Chris Suelzle, director of minerals management for the Department of Trust Lands, remarked that the acreage's value has significantly increased due to the efficiencies gained from longer lateral drilling.

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Despite the positive production outlook, Anderson expressed pessimism regarding oil prices for 2026, citing global oversupply as a primary concern. The Energy Information Administration projects that the price of West Texas Intermediate crude oil will remain in the low $50s per barrel throughout 2026, with North Dakota oil typically sold at a discount of approximately $6.61 per barrel due to transportation costs and refinery demand.

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Nathan Anderson stated, “I’m bearish probably for the next 12 months,” indicating a cautious outlook for the oil market. He highlighted that the current production levels are above the state’s revenue forecast for the 2025-27 budget cycle, despite prices being nearly 10% below forecast.

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While the advancements in drilling technology have been beneficial, some critics argue that reliance on such innovations may mask underlying vulnerabilities in the oil market, particularly in the face of fluctuating global prices and environmental concerns related to drilling practices.

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• “Every time somebody thinks that the industry is essentially kind of maxed out on their technical capabilities, they usually come through with some type of innovation,” — Nathan Anderson, Director, North Dakota Department of Mineral Resources

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• “If they can pay off a well in eight months, they can drill more wells.” — Kelly Armstrong, Governor of North Dakota

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• “You’re getting more out of a 3- or 4-mile lateral in your rate of return because you just don’t have to spend as much money.” — Chris Suelzle, Director of Minerals Management, Department of Trust Lands

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