ND prominent again in national rig count

A Houston-based company that has tracked U.S. oil drilling activity for more than half a century once again considers North Dakota one of the big players in the nation's energy industry.

Baker Hughes Inc. never stopped counting oil rigs in North Dakota, but in 1998 the company removed the state from its list of those with major drilling activity. The list is widely disseminated by the media.

Baker Hughes at the time cited a lack of drilling in North Dakota. The company does not have figures for 1998, but its data show that two years later, only 19 rigs were operating in the state.

As of Friday, 67 rigs were operating on the North Dakota prairie. And North Dakota was back among the "major" states listed in the rig count.

Ron Ness, president of the North Dakota Petroleum Council, said that's no surprise.

"You increase oil production by 50 percent over the past 30 months, you get back on the map with the big boys," he said.

North Dakota has hit records this year for monthly oil production and North Dakota sweet crude price. Oil production also is on pace to set a record for the year, according to the state oil and gas division.

"There's been a lot of activity going on up there in terms of the Bakken," said Gene Shiels, assistant director of investor relations for Baker Hughes. "I think we're seeing (North Dakota oil activity) significant enough to highlight it again in the weekly report."

The Bakken shale formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba, with about two-thirds of the acreage in western North Dakota. The U.S. Geological Survey has estimated that up to 4.3 billion barrels of oil can be recovered from the formation using current technology, with up to 2.6 billion barrels being recoverable in North Dakota alone.

Oilmen have known for decades that the oil was there. Record oil prices in recent years drove technology improvements that are now enabling energy companies to tap into the oil sandwiched between layers of rock.

"The Bakken oil play is one that 10 or 15 years ago probably wouldn't have been a significant play," Shiels said. "One of the things that's really given rise (to it) is horizontal drilling."

Horizontal drilling is a method in which companies first drill vertically, then turn horizontally to tap into the oil, using pressurized fluid and sand to break pores in the rock and prop them open to recover the oil.

Baker Hughes has tracked rig counts since 1944. Nine other states currently are listed in the count as being "major" oil-producing states: Alaska, Arkansas, California, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Wyoming.

In the most recent count, North Dakota ranked seventh in terms of number of rigs but had the second-biggest increase over the year with 29 more rigs, behind only Texas with an additional 84.