After averaging 140 in August, 143 in September, and 151 in October, the North Dakota rig count continued to climb during November with last week's count setting an all-time high record at 159 rigs. The growth in the region has been nothing short of phenomenal considering that this time last year the count was below 70 rigs. Compelling well economics in combination with a push by E&P firms to sustain production growth momentum in the region collectively point to a solid opportunity for the rig count to continue its ascent in the upcoming months.
According to the North Dakota Industrial Commission - Oil and Gas Division, of the 44 operators drilling in the state, seven E&P firms are using 77% of the rigs. The operator with the most rigs drilling currently is Continental Resources with 20 rigs. Cyclone Drilling is the primary contractor for Continental supplying 13 rigs. The next largest operator is Whiting with 15 rigs drilling. Pioneer Drilling supplies 6 rigs, making it the most concentrated vendor for Whiting. Hess and EOG are tied for third largest operator with each running eleven rigs a piece. Hess splits their drilling load evenly between Nabors (5 rigs) and Helmerich & Payne (5 rigs). EOG on the other hand spreads out their workload evenly among several vendors. Marathon, Oasis, and Petro Hunt are tied for fifth place with each operating six rigs a piece.
Overall, Nabors is by far the largest drilling contractor in the state supplying 37 rigs or controlling 23% of the market. The next largest driller is Helmerich & Payne with 19 rigs in the state. Not far behind is Precision with 17 rigs. Cyclone, Ensign, and Patterson UTI round out the leading contract drillers in North Dakota. Collectively, the top drillers account for 67% of the entire market share within the state.
We expect that as the production in the region continues to ramp that the demand for rigs in the Bakken will continue to remain high. During September, production amounted to 341k bbls/day of oil (an all-time record) from 5,197 producing wells. The number of producing wells grew 2% compared to August 2010. Another positive sign for continued success in the Bakken is recently announced 2011 preliminary E&P budgets. Most are suggesting that they will attribute even greater proportions of their budgets to the region. Finally, leasing activity remains strong along with recording setting permitting results (167 permits) for the most recent month announced (September 2010).
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