fedgazette

Oil continues to boost western North Dakota economy

North Dakota State Roundup

Published July 1, 1997  |  July 1997 issue

When North Dakota's oil industry turned around in 1995, some feared a recurrence of the boom-and-bust cycle of a decade earlier. But with steady activity predicted to continue through 1997, those fears appear unfounded.

A combination of factors has lead to steady oil exploration and drilling activities, according to Lowell Ridgeway, executive director of the North Dakota Petroleum Council. New technology like horizontal drilling has made it profitable for oil companies to revisit some of the areas involved in the 1980s oil boom. Burke County, on the Canadian border, for example, is the latest state leasing hot spot, Ridgeway says, because horizontal drilling is occurring on the Canadian side of the same oil-producing formation.

In addition to new drilling technology, which is especially well adapted to North Dakota oil producing formations, North Dakota remains attractive to oil companies because it is a relatively young oil-producing state and still relatively undrilled. In 1996 North Dakota was one of a few states, if not the only one, to increase its oil production and in '95 was the only one, Ridgeway says.

Bowman and Slope counties in the southwestern corner of the state have experienced new drilling activity. Bowman, ranked fifth among the 14 oil-producing counties in 1995 and third by the end of 1996, is currently the top oil-producing county, mainly due to the discovery of what is called the Red River B formation. Bowman County's oil-producing formations largely explain the big jump in permit applications last year: 400 of 566 issued, up from 278 statewide the previous year. While perhaps only 100 of those 400 sites will actually be drilled, Ridgeway says, the competition in Bowman County, mainly between two companies, for control of drilling locations is a positive sign.

In addition to the increased permit applications in 1996, North Dakota's oil industry:

  • brought the state $52.6 million from extraction and production taxes, a $9.4 million increase over 1995.
  • turned over $1.6 million to the states Lands and Minerals Trust and more than $8.4 million to the Board of University and School Lands Trust.
  • increased oil sector jobs by about 500 over 1995 figures to 2,525.
  • produced crude oil valued at over $624 million in 1996.
  • used horizontal drilling techniques to drill 104 wells.
  • averaged 18 oil rigs a day, up from an average of 11 in 1995.

Kathy Cobb

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