Oil price drop could lead to shutdown at North Dakota rigs

Author:
Updated:
Original:

Falling oil prices could halt drilling at several rigs in North Dakota, the state's top oil regulator has warned.

The price of sweet crude hit $66.25 per barrel on Wednesday, InForum reports, which is a 20 percent drop from July.

This has meant good news for drivers, with average regular unleaded gas prices in Minnesota dropping below $3 a gallon this week, but the outlook is less positive for oil producers.

The number of operational rigs in North Dakota on Wednesday stood at 190, down 13 percent from the all-time high of 218 at the end of May, according to the state's Department of Mineral Resource's most recent figures, but the department's director, Lynn Helms, said drilling could stop at another 10 rigs because of the prices.

“We have three counties that right now are below breakeven," he told the Minot Daily News. “It would not be economically viable to drill wells in those counties."

“It puts eight to 10 rigs at risk. It's impossible to predict when those rigs could go out of service. We're at 190 today, so it's less than a 10 percent impact,” he told the paper.

Helms identified Burke, McLean, Bowman and Slope counties as areas where drilling wells is currently uneconomical, as their breakeven marks – the point at which they stop being profitable – are at $81, $73 and $75 respectively.

But while the price of oil has more than halved in the last six years, it is still well above the $28 a barrel breakeven point for rigs in McKenzie County.

The Bakken oil formation recently generated its billionth barrel, according to the state's figures, and August was also a record month as 35 million barrels were produced.

Minnesota is one of seven states currently with gas prices below $3 a gallon, USA Today reports, and a continued drop in prices could see prices pushed down a further 20 cents by early November.

Next Up

Mondale

Walter Mondale dies at age of 93

His death was confirmed by family on Monday.

National Guard

Man charged in connection to shooting that injured National Guard troops

Four soldiers were inside a military vehicle that was shot at.

Chauvin trial

Walz declares emergency in Twin Cities, bringing in police from Ohio and Nebraska

The governor has asked the Legislature for emergency funding for the additional police.

derek chauvin court - closing arguments

Closing arguments in Derek Chauvin trial: Here's what was said

The jury listened to lengthy presentations from the prosecution and defense.

helicopter-186718_1280

Man, 55, airlifted to a hospital after hit-and-run in Granite Falls

The passenger in the vehicle told police about the incident.

Minneapolis, unrest

Facebook labels Minneapolis 'high-risk,' will remove posts that incite violence

Facebook will remove posts that call for weapons to be brought to Minneapolis and anything that celebrates George Floyd's death.

MyPillow

After being sued, MyPillow is now suing Dominion Voting Systems

The company's lawsuit claims the voting system suppressed free speech and hurt its business relationships.

Chet Holmgren

Chet Holmgren makes his decision ... and it's Gonzaga

The Minnesota basketball phenom is following the footsteps of Jalen Suggs.

Sarah Glover

MPR News hires NBC's Sarah Glover as new managing editor

The experienced journalist was the first to serve two terms as president of the National Association of Black Journalists (NABJ).

football play

Watch: Sixth-grader with cerebral palsy makes touchdown in Detroit Lakes

Kale Hannahs' classmates made sure he got a chance to play during recess.

coronavirus, covid-19

Here is Minnesota's COVID-19 update for Monday, April 19

The latest from Minnesota health officials.

Related