Williston Basin Rig Count at 185 - End of April 2013

Williston Basin Rig Map

The Williston Basin rig count settled at 185 rigs running to end April. That's according to Baker Hughes and includes rigs active in the Montana portion of the basin.

All but approximately five rigs in the basin are drilling in areas prospective for the Bakken and Three Forks formations.

The rig count in the area hit a peak of 224 in June of 2012 and has fallen almost 80% since. Much of the decline has been the result of the use of pad drilling where one rig can drill more wells per year.

Acreage across the region is largely held by production or will be by year-end 2013. That means operators can slow down and focus on efficiency of development.

Bakken Rig Count Down 20% From 2012 Peak

Walking Rig Photo

Bakken drilling activity in North Dakota is at levels not seen in over a year. Approximately 180 rigs were working in the state to start 2013. That's down from almost 220 in May of 2012. The almost 20% drop has many beginning to wonder how long the boom will last.

Don't let the numbers fool you. A lower rig count does not mean fewer wells will be drilled in 2013. Walking rigs will account for over 50% of the rig fleet and pad drilling will overtake single-well drilling this year. Don't forget, it only takes hours to move a rig on a pad versus days to move locations.

Consolidation of the acreage by the larger operators, like Continental Resources, also indicates we're entering a more mature stage in the life cycle of the play. This is where all of the inefficiencies are driven out and the focus shifts to applying everything that has been learned in the past few years. We're already seeing it in faster drill times and new target formations.

Bakken Frack Crews are in Short Supply

Bakken Shale drilling has grown to well over 200 rigs working, but the number of hydraulic fracturing (fracking) service crews has not kept pace. The number of wells waiting to be completed in North Dakota has grown to 300 more than normal. The number is holding constant, which means we're keeping up with the number of rigs working currently, but we won't elimiate the backlog without additional completion crews. If the backlog is diminished, North Dakota will continue its path of surpassing OPEC members in total daily production. The state surpassed Ecuador in November of 2011. If the state reaches 800,000 b/d it begin to challenge the ranks of the top 25 countries in the world.

North Dakota Rig Count Sets Record at 204 - November 2011

The North Dakota rig count reached an all time record on November 19, 2011, when the ND Oil & Gas Division announced there were 204 active rigs working in the state. The overwhelming majority of rigs are targeting the Bakken and Three Forks formations. With oil prices holding strong and gas prices dropping through the fall, I expect we'll potentially shoot through this record when a few gas directed rigs head our way.