Continental Resources, the largest lease holder in the Bakken shale of North Dakota and Montana, might not be the only oil and gas exploration company to cut back on its drilling in North Dakota because of current price conditions.
The company’s revelation was what a spokesman at the North Dakota Mineral Resources Department called a “hot” topic as the media peppered the agency about the impact of the decision by the Oklahoma City-based energy company.
During a briefing on Friday, Nathan Anderson said other firms have indicated they might do the same. Continental founder Harold Hamm confirmed this week his company has already stopped drilling with one of its three rigs in North Dakota and eventually by March, will end exploration by the remaining two rigs.
“We have had an indication that there’s a couple other operators that plan to reduce a rig or two. So beyond that, that’s what we do know right now. I think it’s two other operators that indicated they had planned to drop a rig, so that’s what I know,” explained Anderson.
He further explained that Continental Resources, the state’s number two oil and gas producer and a long-time firm with North Dakota operations informed the division about 3 to 4 weeks ago of its intentions.
“So they would finish the projects that the rigs were currently on. I believe that’s expected to be completed sometime during March. And the idea is that they would continue the completions on those wells that they have drilled, but not yet completed.”
He said the cutback on drilling by Continental should not impact the company’s actual production.
“They’ve actually indicated to us that they plan to continue to run 25 work over rigs directly from Continental. And I’m not a spokesperson for Continental, but they’re dropping their oil-focused rigs to avoid adding to the oversupplied market…,” Anderson added.
As for the impact on the state’s oil and gas production, nothing is definite.
“What we haven’t really seen is what I would call a significant pullback in activity that leads to a reduction in production—yet,” he said with a definite pause.
” Certainly, this news from Continental on reducing its North Dakota drilling by three rigs could lead to that, but I’d just be speculating if I said it would be August, September, or October, or something like that.”
North Dakota ranks third in oil production, generating more than 1 million barrels a day and most of it is from the Bakken shale. North Dakota’s ranking is behind Texas and New Mexico. Its production is also attributed to increased horizontal wells, some up to 4 miles in length.
The latest Baker Hughes rig count showed the number of rigs actively drilling in the state was unchanged from the prior week’s count of 26.