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North Dakota rig count near five-year low

Oil production in the state down 2.5 percent from record set in December.

By
Daniel J. Graeber

BISMARCK, N.D., March 13 (UPI) -- The number of rigs actively exploring for or producing oil or natural gas in North Dakota is down to its lowest level in nearly five years, data show Friday.

State data show 111 active rigs in the state as of Friday, down from the 191 reported on this date in 2014 and a historic low. Rig counts, a barometer for the upstream sector in the state, have been on a steady decline for much of the year, down 7.5 percent from the end of February.

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The North Dakota Industrial Commission in its latest monthly report said oil production in January, the last full month for which data are available, was 1.19 million barrels per day, down 2.5 percent from the all-time high reported in December.

There were 156 active rigs reported in the state in January. The rig count of 111 is the lowest for the state since April 2010.

"Oil price is by far the biggest driver behind the slow-down, with operators reporting postponed completion work to avoid high initial oil production at very low prices," the NDIC said in its latest report.

The price for West Texas Intermediate, the U.S. benchmark, was around $46.50 in early Friday trading, about 4.6 percent above the low set in January, but more than 50 percent below the mid-June high of around $107 per barrel.

Nearly all of the drilling in North Dakota targets the Bakken and Three Forks formations, situated largely in Williston County. The NDIC said the rig count in the Williston basin "has fallen rapidly" and leasing activity is "very low."

State revenue is supported by oil and gas operations. A Thursday report from the U.S. Energy Information Administration said tax revenue collected from oil and natural gas production in North Dakota was down 21 percent from August 2014.

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