N.D. regulator: Prices slow some oil drillingFalling oil prices may slow drilling in some fringe areas of northwestern North Dakota’s Bakken region, but its best-performing areas should remain profitable for most producers, the state’s top oil regulator says.
WILLISTON, N.D. (AP) — Falling oil prices may slow drilling in some fringe areas of northwestern North Dakota’s Bakken region, but its best-performing areas should remain profitable for most producers, the state’s top oil regulator says.
“Most of the people who are in the business have experienced the previous price collapses ... so there are always concerns. Are there immediate concerns? No. I think people are looking at the longer term,” said Lynn Helms, director of the state Department of Mineral Resources.
Helms expects drilling and production will not change in Dunn, McKenzie and Mountrail counties, where the most promising Bakken shale results have been found.
In Burke, Divide, McLean and Ward counties, the production costs tend to be higher, Helms said.
Oil prices have fallen from more than $140 a barrel in July to just above $70 a barrel last week. Helms said the break-even production price in Mountrail County has fallen dramatically, to about $20 a barrel, while the break-even price in Dunn and eastern McKenzie County is about $40.
In contrast, oil prices need to be about $80 a barrel for producers in Burke County to make money. In Divide County, the price is about $55, Helms said.
Rick Ross, vice president for operations at Whiting Petroleum Corp. in Denver, said Whiting has drilled “very prolific” wells in Mountrail County. “We can stand a lower price than in other places.”
Whiting has 22 completed wells in western North Dakota. The economic considerations for each company and well are different as oil prices fall, Ross said.
“It’s not that we all fall off the table at once,” he said. “There’s a huge range.”
County recorders in oil-producing counties say they’re seeing fewer landmen who visit the courthouse to research mineral leasing prospects.
“I think it’s because everybody is pretty much leased up,” said Chris Larsen, the Dunn County recorder.