ND oil rig count tops 100 for first time in 2 decades

ND oil rig count tops 100

BISMARCK, N.D. — The number of rigs piercing North Dakota’s oil patch has topped 100 for the first time in nearly three decades, the state Department of Mineral Resources said Wednesday.

Department director Lynn Helms said 102 rigs were drilling in western North Dakota’s oil patch on Wednesday — the first time since 1982 that the number of rigs in the state has hit the three-digit mark.

“This is a really important milestone,” Helms said. “To have this kind of activity and a resource play that could keep these rigs busy for another 10 years is just remarkable.”

North Dakota has 4,628 active oil wells, up from 4,151 this time last year, Helms said. The state produced about 79.7 million barrels of oil in 2009, up from a record 62.8 million barrels the year before.

At the current pace, the state could hit 350,000 barrels of oil daily by late 2011, or about 100,000 barrels a day more than now, he said.

“This is full throttle,” said Ron Ness, president of the North Dakota Petroleum Council. The number of rigs could increase another 25 percent this year if crude prices hold, he said.

North Dakota sweet crude was fetching $76.35 a barrel on Wednesday, up from $40.65 a year ago.

The state had 98 rigs working in late 2008 but the count dropped to about 30 in 2009 due to a harsh winter combined with slipping crude prices and a slumping U.S. economy.

A record 146 drill rigs were working in the state’s oil patch in October 1981. But Helms and Ness said modern drill rigs that use advanced horizontal drilling techniques are much more efficient.

“Today’s rigs, in most cases, are doing what eight rigs did in the 1980s,” Ness said.

It costs about $6 million to drill a well in the Bakken formation, which encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it ever has assessed.

Helms said technology is moving swiftly in the oil patch. In the past 18 months, oil companies have decreased the time needed to drill a Bakken well from about 45 days to about 20 days, he said.

Increased oil activity also has a downside; it means more traffic, a strain on roads, housing and other infrastructure, Ness said.

“With 100 rigs drilling, certainly there are challenges,” Ness said.

Each active oil rig represents about 40 direct jobs and 80 indirect jobs in the state. Ness, whose group represents about 160 companies, said the industry is hampered by a lack of workers.

“There are 12,000 people working the in the patch right now, and that’s very conservative,” he said. “But there are 81 companies in search of about 800 workers.”