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State on pace for record rig count

By Nick Smith
Staff Writer
Published/Last Modified on Tuesday, July 27, 2010 10:59 AM CDT



With North Dakota setting new records in recent months in production, it was only a matter of time before the state's record of active drilling could be close to being broken.

That time has nearly come.

The number of active drilling rigs in North Dakota is at 136 as of today.

Rig activity peaked at 146 in October 1981.

The rig count has been steadily rising since the beginning of the year. North Dakota Oil and Gas Division Director Lynn Helms said the level of oil activity is approaching full capacity for the infrastructure the state has to handle it. However, he expects the activity to continue to climb.

"There doesn't appear to be any slowdown in anybody's plans in the near future. We fully expect to break the drilling rig record before the end of the year," said Helms.

Helms said unless something happens such as a large drop in oil prices or new federal regulations, things are likely to continue to climb.

He said the peak number of rigs the region can sustain with the available infrastructure is "a little bit of a moving target."

Helms said the number could likely peak this year in the neighborhood of 150 rigs.

Oil companies, he said, are continuing to increase their workloads. He said right now there is low risk and high profitability for them to ramp up drilling, so that's what they're doing.

Helms said it's going to take the next year or two for the infrastructure capabilities to catch up with activity. He said he could see the rig count passing 150 and going even upwards of 175 after this year.

"It's going to take a year or two to build up the capacity for 175 drilling rigs," said Helms.
 

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