North Dakota oilfield activities expected to increase in the second half of the year, regulator states

The 'Department of Mineral Resources' in North Dakota said that oilfield activity will increase in the second half of the year, as operators speed up completions and add more rigs to take advantage of high oil prices. The Iran conflict and disruptions in Middle Eastern oil supply have kept prices high, which has encouraged producers to increase activity.

According to data from the Department, the number of North Dakota oil rigs increased to 33 in August from just 26 in July.

These operators do not move rigs into North Dakota in order to drill DUC wells, and then complete them later. "I suspect that we'll see an increase in completions and activity during the second half of the year," said Justin Kringstad. He was referring to the wells which have been drilled, but are not yet completed.

U.S. crude oil futures for March delivery were trading at around $78 per barrel, which allows time to drill the well and obtain first oil.

Bakken oil delivered in Clearbrook, Minnesota was trading at $4.39 per barrel more than U.S. crude.

The sharp rise in rig counts this month tells me two things: either operators are taking advantage of the price increase, or they're more confident that the $80 environment will last for a while longer.

In August, 19 operators are operating rigs compared to 14 in July. The latest data shows that completions rose from 65 in June to 74 last month.

The top producers in the state are Chord Energy. Continental Resources, ConocoPhillips. Devon Energy, and Chevron. They account for two-thirds or more of production.

According to the regulator, North Dakota is the third largest oil producing?state. Its oil production increased by 28,000 barrels a day from May to June to reach 1.153 millions bpd. Reporting by Georgina?McCartney and Arathy?Somasekhar, Houston. Editing by Rod Nickel.

(source: Reuters)