U.S. oil companies in North Dakota are cautious about drilling despite rising prices

?U.S. Oil operators in North Dakota are cautious about increasing?drilling? despite the sharp rise in oil price caused by the Iran War. They want to know if the higher prices will last for long enough to justify the new investment.

Mark Bohrer is the assistant director for the Oil and Gas Division of the State's Industrial Commission. He said that while the prices are higher, the majority of producers have stuck to their budgets from the end of last season, which has limited any immediate increase in drilling activity. The output could increase in the short term, as more wells will be completed and drilling activity will pick up.

Bohrer stated that Continental Resources, the state's second largest oil producer, had planned to add a drilling rig after having already laid down one earlier this year. He said that other companies may consider adding a few rigs if oil prices remain high. U.S. WTI settled at $96.60, up 25 cents on Friday as investors questioned the prospects of a breakthrough for U.S.-Iran talks. The benchmark U.S. oil contract has increased 44.1% in value since the start of the war, late February.

Local media reported that Harold Hamm of Continental Resources, the chief executive who helped pioneer fracking, will put back drilling crews to work following a temporary break announced in January. ConocoPhillips COP.N, EOG Resource EOG.N and Diamondback Energy FANG.O also plan to divert resources to drill or expand wells, mainly in Permian Basin, to take full advantage of the 'price environment.

According to the regulator, North Dakota had 26 active rigs in May, the same as in April. Thirteen 'hydraulic fracture crews' were also working in the state.

The regulator reported that oil production in North Dakota increased by 9,000 barrels per daily (bpd) in March to 1,142.725 bpd, citing the most recent data. Bakken and Three Forks production of oil also increased by 11,000 barrels per day (bpd) in March compared to February, according to the regulator.

Bohrer expects the oil production of the third largest oil producing state in the United States to remain stable in the months ahead, although it could increase slightly in the short term.

Operators brought 49 wells on line during the month. The pace of completions should increase as more fracturing teams are in operation.

(source: Reuters)