ND oil rig count increases 25 percent since March; state says 127 rigs working at present

ND oil rig count jumps 25 percent in 3 months

BISMARCK, N.D. — The number of rigs drilling in North Dakota’s oil patch has jumped 25 percent in three months and more than tripled in the past year, the state Department of Mineral Resources said Monday.

Strong crude prices, weak natural gas prices and investors’ shift from offshore drilling after BP’s oil spill in the Gulf of Mexico are responsible for most of the growth, department director Lynn Helms said.

North Dakota sweet crude was fetching about $75 a barrel Monday, up about $25 from a year ago but down from a record $136.29 in July 2008.

There are 127 rigs drilling in western North Dakota’s oil patch, up from 102 in March, Helms said. About 40 rigs were working in North Dakota last July, Helms said.

Each rig provides 40 direct jobs and 80 indirect jobs in the state, state and industry officials have said. Nearly all are drilling the rich Bakken shale and Three Forks-Sanish oil reservoirs in western North Dakota, Helms said.

“The collapse of natural gas prices is causing some rigs to move here,” Helms said. “Rigs that drill horizontal gas shales all over the country are the same rigs that can drill the Bakken. Gas prices have been so weak that a lot of those rigs are able to come to North Dakota.”

A rebound in natural gas prices could drop the drill rig count in North Dakota, he said.

“There will be a big pull to move rigs out of North Dakota if there is hard winter and natural gas prices go up,” he said.

Helms said North Dakota’s oil production also may be benefiting from the oil spill in the Gulf.

“What’s going on with BP’s spill in the Gulf of Mexico, with worries about investments in offshore drilling, I’m guessing it has had a positive effect on North Dakota’s rig count,” he said.

But Ron Ness, president of the North Dakota Petroleum Council, said the environmental disaster offshore hasn’t had an immediate effect in North Dakota.

“I don’t think it’s had any impact,” Ness said. “It takes a long time for capital assets to be deployed. And generally speaking, it’s a different set of players.”

A record 146 drill rigs were working in North Dakota in October 1981. But modern drill rigs that use advanced horizontal drilling techniques are up to eight times much more efficient, industry officials say. North Dakota surpassed 100 rigs in March for the first time since 1982.

North Dakota had 4,810 active oil wells in April, producing a record 284,345 barrels of crude daily.

The state has jumped from ninth to fourth in the nation in oil production since 2006. It produced about 79.7 million barrels of oil last year, up from a record 62.8 million barrels the year before.