ND oil rig count matches record set in 1981

By JAMES MacPHERSON

BISMARCK, N.D.

The number of rigs piercing North Dakota's oil patch has matched the previous record set nearly three decades ago, with 148 rigs now drilling in the state, officials said Tuesday.

North Dakota surpassed Louisiana last year as the fourth-largest oil-producing U.S. state. Rig counts dropped to about 30 early last year but have rebounded with the price of crude.

The number of rigs currently drilling in North Dakota equals a record set in October 1981, said Lynn Helms, director of the state Department of Mineral Resources.

"I've been watching it and watching it every day but I really didn't think we'd get there until the end of the year," Helms said. "I'm pleasantly surprised."

Modern drill rigs that use advanced horizontal drilling techniques are four to eight times more efficient than rigs that drilled vertical wells in the 1980s. Each active oil rig represents about 40 direct jobs and 80 indirect jobs in North Dakota, state and industry officials say.

North Dakota produced a record 9.9 million barrels of oil in July, up from the previous record of 9.4 million barrels set in June, according to the most recent data available from the state. A record 5,051 wells were producing in July, up from the previous record of 4,977 set in June.

The state's natural gas production in July was pegged at a record 9.9 million cubic feet, up from 9 million cubic feet in June.

Helms estimated that North Dakota's oil production in August would be about 10.5 million barrels, with about 5,200 active oil rigs.

Nearly all the rigs are drilling in the rich Bakken shale and Three Forks-Sanish oil reservoirs in western North Dakota, Helms said.

"I think this indicates how substantial the Bakken and Three Forks play is," Helms said. "It's pretty remarkable."

The Three Forks is made up of sand and porous rock directly below North Dakota's portion of the Bakken formation, where oil-producing rock is sandwiched between layers of shale about 2 miles underground.

Two years ago, the U.S. Geological Survey estimated that up to 4.3 billion barrels of oil could be recovered from the Bakken in North Dakota and Montana, using current technology. The agency called it the largest continuous oil accumulation it has ever assessed.

A study released this year by North Dakota's Industrial Commission said current technology could lead to the recovery of about 1.9 billion barrels in the Three Forks-Sanish formation in North Dakota.

Oil production has nearly doubled in the past two years in North Dakota. Production records have been set every month since January. Production in July was nearly 3 million barrels higher than in July 2009.

It costs about $6 million to drill a well in North Dakota's oil patch. State and industry officials have said that advancements in rig technology in the past two years have decreased the time needed to drill well in North Dakota from about 45 days to about 20 days.