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Natural gas production hit a record in April in North Dakota.

Natural gas production hit a record in April in North Dakota. (Richard Tsong-Taatarii/Minneapolis Star Tribune/TNS)

Oil production in North Dakota will likely be flat or lower in September because of heavy rains. But in August, the state set another record.

"In most respects, we set new records everywhere," Lynn Helms, director of the North Dakota Department of Mineral Resources, said Tuesday on a conference call discussing August results.

Helms said the October snowstorms did not affect oil production as much, so he expects to see records in oil and gas production again either in October or November.

North Dakota, the second-largest oil-producing state after Texas, produced 1.48 million barrels of oil per day in August, up 2.5% over July.

Natural gas production was up 2% over July to 3.01 million MCF. An MCF is 1,000 cubic feet of gas.

The state's rig count - an indicator of drilling for new wells - is still healthy for the time of year. There are now 60 rigs, down from 62 in August.

Natural gas production, Helms said, is at capacity and if the state had more infrastructure, it would be higher.

The natural gas industry, he said, has done a better job at controlling flaring, which is the burning of excess natural gas. The rate has been above the state's target much of the year.

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In August, the capture rate was better at 81%, up from 77% in July. But it still did not meet the state's 88% goal.

"The only area we're struggling in is oil prices," Helms said.

The federal government's weekly report showed Brent crude, the global-oil price, at $59.91. The West Texas Intermediate - the benchmark U.S. crude prices - was at $59.93 Thursday. The WTI benchmark was at $73 last October.

This year, it has stayed stubbornly in the $50s, Helms said, currently because the European economy and Chinese manufacturing are both weaker with uncertainty over Brexit and the U.S. trade tariffs.

The federal report Thursday said as a positive, the industry tapped into gasoline stores, lowering inventory. But crude oil inventories were up because refinery output was at 83.1%, the lowest it has been since Hurricane Harvey hit in 2017, Reuters reported.

The low oil prices have hit oil companies, some of which have announced U.S. layoffs as a result. Whiting Petroleum, which is based in Denver but focuses much of its activity in North Dakota, announced in the summer it would lay off about 250 employees, one-third of its workforce.

Oilfield services provider Halliburton earlier this month announced it would cut 650 U.S. jobs as weak oil prices have drilling companies putting off investments. Helms said North Dakota lost jobs in the "low single digits" at the company's Dickinson operation.

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