North Dakota oil drillers are currently running 29 rigs, down from 32 in June, the state regulator said on Tuesday, as operators continue to deploy more efficient drilling technologies.

More efficient drilling allows operators to do more with less, lowering capital expenditures while at the same time extracting more oil.

“The decline in the rig count does not necessarily mean we have less rock being drilled,” said Nathan Anderson, director of the state’s Department of Mineral Resources.

Oil production in North Dakota fell 61,000 barrels-per-day (bpd) to 1.1 million bpd in May, monthly data from the state Industrial Commission showed.

“The price environment in April and May meant certain operators decided to curtail some production in areas of the state,” Anderson said, adding that low April well completions weighed on May production.

June production will likely be similar to May, while July output will increase, Anderson said. Operators who had curtailed production are now starting to bring those wells back online, he added.

There were 65 completions in June, down from 74 in May but a jump from just 43 in April.

U.S. crude futures averaged $63 a barrel in April, down from around $68 in March, according to data from LSEG.

Oil prices fell in April after U.S. President Donald Trump unveiled an array of trade tariffs, stoking concerns of a recession and a drop in fuel demand.

There are currently 13 hydraulic fracturing crews in the state, steady on the month, according to the state regulator.

Bakken oil delivered at Clearbrook, Minnesota, was pricing at a 75 cents per barrel premium to West Texas Intermediate on Tuesday, the state regulator said, steady on the month.

North Dakota is the third-largest oil-producing state, home to the Bakken oilfield.
Source: Reuters