Helms: Concern, not panic, over oil price drop
The director of North Dakota’s mineral resources department expects the number of drilling rigs operating in the Bakken to drop – because of lower oil prices.
Lynn Helms says as of last week, there were 183 rigs working in the oil patch.
"We've already been advised by a half-dozen companies that, from January through March, they expect to 'ladder' their rig count down by 30," said Helms. "If this decline holds well into next year, we could see another 12-15 rigs being released."
Helms says companies also say they plan to concentrate their efforts into the four counties where it is most economical to drill – including Williams, McKenzie, Dunn and Mountrail counties.
Meanwhile, Helms says reacting to oil prices from both the industry and state government is concern, but not panic.
"The state has tried to build a revenue structure that doesn't depend, for general fund dollars, on oil production taxes or oil extraction taxes," said Helms. "But indirectly, it does affect the general fund through sales and income taxes."
Helms says if the price drops further, certain tax breaks will kick in for the oil industry.
"The overall effect will be to keep people working," said Helms. "And that will keep capital investment going, so the sales taxes will be paid."