Oilfield activity in North Dakota is set to rise in the second half of the year as operators add rigs and speed up completions to collect high oil prices, the state Department of Mineral Resources said on Thursday. An impasse in the Iran war and disruptions to Middle Eastern supply have kept oil prices elevated, encouraging producers to ramp up activity.
The North Dakota rig count jumped to 33 in August from 26 in July, according to the department’s data.
“These operators are not moving rigs to North Dakota to drill DUC wells and complete them at a later date… I suspect we will see some increases in completions and activity in the second half of this year,” said Justin Kringstad, executive director of the North Dakota Pipeline Authority, referring to wells that have been drilled but not yet completed.
U.S. crude futures for March delivery, allowing for the time to drill a well and get first oil, were trading around $78 a barrel.
Bakken oil delivered at Clearbrook, Minnesota, was trading at a premium of $4.39 a barrel to U.S. crude futures.
“The sharp increase in the rig count this month really tells me that operators have two things they are taking advantage of: the short-term increase in prices, or they have more confidence that the $80 price environment is going to last a little bit longer,” said Nathan Anderson, director of the Department of Mineral Resources.
As of August, there are 19 operators running rigs, compared with 14 in July. Completions rose to 74 in July from 65 in June, the latest data showed.
Top producers in the state include Chord Energy, Continental Resources, ConocoPhillips, Devon Energy and Chevron, accounting for around two-thirds of production.
North Dakota is the third-largest oil-producing state and its oil production rose 28,000 barrels per day in June compared with May to reach 1.153 million bpd, according to the regulator.
(Reporting by Georgina McCartney and Arathy Somasekhar in Houston Editing by Rod Nickel)