N.D. oil drilling still going strong, officials say Janell Cole The Dickinson Press - 10/30/2008 BISMARCK — North Dakota oil is now selling for about $57 per barrel, down from $136 in June, but it’s hard to tell out in the oil patch, where 93 drilling rigs are still punching holes in the landscape and producing wells are putting out 178,000 barrels per day and rising.
“There isn’t any evidence of a slow-down,” said state Director of Mineral Resources Lynn Helms on Wednesday after he and Oil and Gas Division Assistant Director Bruce Hicks updated the state Industrial Commission on recent and current activity. Helms doesn’t think the number of drilling rigs will rise with the current prices. And he said there is talk and rumors about the activity slowing down. Hicks said the state is on track this year to issue more than 1,100 well-drilling permits, breaking the record set in 1981 of slightly under that number. He said the average number of rigs drilling in the second quarter of this year was 70. And 93 drilling rigs working at one time is a latter-day record, Helms said. It is exceeded only by the 147 rigs that were set up here in1981. But having 93 drilling rigs accessing oil in this era of high-tech horizontal drilling is the equivalent of what 300 or more of the old- style vertical drilling rigs could reach, he said. “If you look at what a drilling rig is doing today, it’s doing the same work that four to eight of those (vertical) drillings rigs,” he said. In horizontal drilling, the holes are drilled vertically through the earth and rock and then a technique developed this decade is used to turn a corner and have the wellbore run out through the oil-producing rock formation in one or more horizontal legs, reaching more oil deposits than the vertical wells did. One reason the rig count is still healthy, Helms said, is that oil companies have invested a lot of money in buying up leases and want to develop those investments. Ron Ness, president of the North Dakota Petroleum Council isn’t quite so upbeat. He’s talked to a number of operators and land companies recently. “We are hearing about rigs being idled” and land companies are slowing leasing activity, he said in an interview Wednesday. “Oil companies are reassessing what they’re doing.” A lot of oil companies are going to keep going for now because they have signed contracts to keep certain rigs going for a certain number of wells or for a year or two. It takes $6.5 million to $9 million to drill a well in North Dakota, Helms said. He said the break-even per-barrel price of oil differs from county to county. In the heart of the Bakken Formation boom, Mountrail County, oil could dip to as little as $14 and wells would still be profitable. In Dunn County, it’s $35, in McKenzie County it’s $38, he said. Williams County is $46 and Divide County is $53. Wells drilled closer to the edges of the Bakken aren’t as profitable. The break-even price in Burke County is $98 and in Ward County, it’s $170. Ness says it’s not that simple. “I think it’s hard to categorize like that,” he said. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Bakken Shale Discussion" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/bakken-shale-discussion?hl=en -~----------~----~----~----~------~----~------~--~---
