North Dakota rig count low sets new record

Rig count as of Monday is two fewer than previous low of 27 set in July 2005.
By Daniel J. Graeber  |  May 23, 2016 at 8:51 AM
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BISMARCK, N.D., May 23 (UPI) -- State data in North Dakota show the number of rigs searching for or producing oil and gas as of Monday broke a record low set more than 10 years ago.

State data show 25 rigs actively producing or exploring for oil or natural gas as of Monday. By two rigs, that breaks a record low set in July 2005 and comes at a time when energy companies are spending less on exploration and production because of lower crude oil prices, despite recent recovery.

The all-time low point for rigs in North Dakota is zero.

Rig counts serve as a loose barometer for the health of the oil and gas industry, which has been bruised by weak economics. Oil services company Baker Hughes last week reported the U.S. rig count dropped by 2 from the previous week. That compares with Canada, which gained a rig despite fires raging in Alberta, the heart of the nation's oil sector.

By volume, Texas lost the most rigs in the United States last week with seven. North Dakota is the No. 2 oil producer in the United States behind Texas.

More or less since April, crude oil prices have been on the road to recovery, pulling up from lows below $30 per barrel in early 2016. Hess Corp., one of the more active players in North Dakota, said its first quarter spending on exploration and production was $544 million, down nevertheless 56 percent year-on-year.

North Dakota oil and gas leaders have said that energy companies working in the state are committed to running only a small number of rigs.

State data show oil production in March, the last full month for which figures are available, at 1.11 million barrels per day, a decline of about 1 percent from February. Natural gas production, however, reached an all-time high for the state last month at 1.7 million cubic feet per day.

North Dakota hosts a three-day oil and gas conference starting Tuesday.

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