This is what the Director of ND's Dept. of Mineral Resources O&G Division Said Yesterday | BRYYY Message Board Posts

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Msg  150082 of 453590  at  10/16/2014 12:01:15 PM  by

sophocles

The following message was updated on 10/16/2014 12:01:52 PM.

This is what the Director of ND's Dept. of Mineral Resources O&G Division Said Yesterday

 

How crude prices will impact the Bakken was the main topic of discussion in this month’s Director’s Cut. Lynn Helms, director of North Dakota’s Department of Mineral Resources Oil and Gas Division, gave his monthly director’s cut assessment of the Bakken and Three Forks formation, emphasizing the impact crude prices could have on the Bakken.

There are many facets that need to be considered when we look for such an answer, Helms said. Brent crude prices have been dropping all summer, reaching a two-year low this week at roughly $84 per barrel. West Texas Intermediate, which trades lower than Brent, is closest in price to Bakken crude. During the webinar, Helms noted that North Dakota sweet crude was being sold for less than $70 per barrel to the Flint Hills Resources Refinery in Minnesota. To the question of when oil prices will rise, he seemed to answer honestly “We don’t really know where the oil prices are heading.”

With the decrease in crude prices, Helms said that a reduction in the state’s rig count at a pace of roughly 10 percent could be in the future. There are three counties—Bowman, Slope and parts of Divide—that aren’t economic with current oil prices, he said.

“The drop in prices puts eight to ten rigs in those counties at risk,” said Helms.

Helms mentioned that Saudi Arabia needs $92 per barrel to satisfy their government needs, which in turn puts them under a lot of pressure as well to change their oil production plans. “We’re in this together,” said Helms. “Not only is North Dakota under a lot of pressure, but so are all of the Organization of the Petroleum Exporting Countries. But, we are watching it [crude prices] and there are serious concerns out there regarding it.”



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