North Dakota oil producers are planning to reduce rigs as a result of lower prices, a state regulator has said

The Department of Mineral Resources in North Dakota said Friday that oil and gas operators have stated they will be reducing rigs and crews in response to lower oil prices. This move is likely to affect output in the country's third largest oil producer.

Prices have dropped below $65, which is the minimum price needed to break even.

North Dakota's breakeven prices have traditionally been between $55 and $60 per barrel, according to Nathan Anderson, the director of the state regulator.

Anderson stated that "we're expecting rig counts to soften a bit and this is most definitely related to the soft prices, as well as a bit of volatility in price right now."

Anderson stated that about four to five operators are planning to abandon rigs, either due to their business plans or low prices.

He added that the state's rig number is likely to fall to around 27 by August. On Friday, the rig count was 31.

Anderson said that two of the fourteen frac crews could be cut. Reporting by Arathy S. Somasekhar, Houston; editing by Chris Reese

(source: Reuters)