Current Active Drilling Rig Count Below What Operators Indicated Would Be Their 2015 Average
September 14, 2015, Lynn Helms, director of the North Dakota Department of Mineral Resources, today published the monthly Director’s Cut stating the current “drilling rig count dropped 5 from June to July, increased 1 from July to August, and dropped 5 this month. Operators are now committed to running fewer rigs than their planned 2015 minimum as drill times and efficiencies continue to improve and oil prices continue to fall. This has resulted in a current active drilling rig count of 10 to 15 rigs below what operators indicated would be their 2015 average if oil price remained below $65/barrel.”
Oil price weakness is anticipated to last well into next year and is the main reason for the continued slow-down. Helms states, “Rig count in the Williston Basin had stabilized, but the drop in oil price associated with anticipation of lifting sanctions on Iran and a weaker economy in China is leading to further cuts.”
Helms advised there were an estimated 914 wells waiting on completion services, 70 more than at the end of June. Drilling permit activity fell sharply from July to August as operators positioned themselves for low 2016 price scenarios. However, operators have a significant permit inventory should a return to the drilling price occur in the next 12 months.
The Tioga gas plant was down slightly to 88 percent of capacity. The expansion of gas gathering from south of Lake Sakakawea was approved, however the approval came too late for the 2015 construction season, resulting in a 1 year delay.
On August 26, 2015 a coalition of environmental organizations filed a 60 day legal notice with the U.S. Environmental Protection Agency demanding more regulation of drilling and fracking waste. The groups are calling on EPA to comply with its long overdue obligations to update waste disposal rules such as instituting stricter controls for underground injection wells, banning the practice of spreading fracking wastewater onto roads or fields, and requiring landfills and ponds that receive drilling and fracking waste to be built with adequate liners and structural integrity to prevent spills and leaks into groundwater and streams. Director Helms writes, “ND may need to intervene to prevent a “Sue and Settle” situation that would adversely impact state regulatory jurisdiction.”
For more information on the Directors Cut, log in to https://www.dmr.nd.gov/oilgas/informationcenter.asp or call the North Dakota Industrial Commission at (701)328-3722