Operators Postponing Completion Work

In the Directors Cut on February 13, 2015, Lynn Helms, Director of the North Dakota Department of Mineral Resources, gave a monthly update on the current activity in the North Dakota oil patch.

Rig count:

November rig count 188

December rig count 181

January rig count 160

On February 13th the rig count was at its lowest since July, 2010. The all-time high was 218 on May 29, 2012. The statewide rig count is down 37 percent from the high and in the five most active counties rig count is down as follows:

Divide - 62% (high was 3/2013)

Dunn -45% (high was 6/2012)

McKenzie -28% (high was 1/2014)

Mountrail -41% (high was 6/2011)

Williams -40% (high was 10/2014)

Director Helms commented, "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 and to achieve NDIC gas capture goals. There were no major precipitation events, only 3 days with wind speeds in excess of 35 mph (too high for completion work), and 2 days with temperatures below -10°F."

Helms later states, "The Obama administration officials announced a plan under which the oil and gas industry would have to cut methane emissions by 40 to 45 percent below 2012 levels by 2025. U.S. EPA will issue new regulations this summer under the Clean Air Act, and a final rule would be in place in 2016. EPA's rulemaking will be done under Section 111(b) of the Clean Air Act, which allows regulation of new sources along the oil and gas supply chain. So the new regulations would apply to new and modified pieces of equipment only and would leave older pieces of equipment unregulated. In North Dakota the Clean Air Act is enforced by the Department of Health." Director Helms will update information on the status and how you can comment on the proposed rule in his monthly Director's cuts at https://www.dmr.nd.gov/oilgas/