Dec 10, 2007 - 04:05:09 CST By JAMES MacPHERSON Associated Press Writer The weather may have turned cold, but North Dakota's oil patch continues to sizzle.
North Dakota has 56 drill rigs operating in the oil patch now, said Bruce Hicks, the state's Oil and Gas Division assistant director.
"Things are very good out there right now," Hicks said. "We're hearing of five to 10 more rigs coming into the state in the next three to four months."
Each active oil rig represents about 40 direct jobs and 80 indirect jobs in the state, officials say.
The state's oil production totaled about 127,000 barrels a day in September, the latest figures available, he said. The peak oil production in the state was about 148,000 barrels a day in 1984.
Federal oil and gas lease sales drew more interest in North Dakota than in Montana and South Dakota for the fourth straight year, the Bureau of Land Management said. It shows no sign of letting up, though the total has dropped from the year before.
Oil and gas lease sales in the three states during fiscal 2007, which ended in September, totaled $11.4 million, with North Dakota accounting for $9.3 million, said Greg Albright, a BLM spokesman in Billings, Mont. He said Montana had $1.6 million in leases, while South Dakota tallied $487,589.
The first BLM oil and gas lease sale in fiscal 2008 already has surpassed all of fiscal 2007. The BLM said $12.8 million was bid, including $11.4 million on 28 North Dakota parcels. The sale included a record $5.2 million for a 320-acre lease in Mountrail County, a sale Hicks called "unbelievable."
Revenues from the oil and gas leases are shared by the federal government and the state or county where the parcels are located, the BLM said.
The total for the three-state region for the last fiscal year was down from $14.3 million in fiscal 2006, when North Dakota accounted for $13.3 million, the BLM said. The record $36 million in lease sales was set in fiscal 2005, with North Dakota garnering about $35 million of that total.
BLM offered 678,137 acres for lease in fiscal 2007, with 285,875 of the acres leased. Only 40 acres of North Dakota's 59,776 acres offered did not receive bids, Albright said.
In fiscal 2006, 65,313 acres were offered and all but 55 acres got bids, he said.
While North Dakota lease sales slid in fiscal 2007, Montana and South Dakota showed increases, Albright said. Montana had $1.6 million in leases, up from $952,597 the year before, while South Dakota had $487,589, up from $44,348 in fiscal 2006.
Most lease sales in the three-state region in the past three years have been on U.S. Forest Service land in western North Dakota's Williston Basin, the BLM said.
"That's where the majority of revenues have come from," said Karen Johnson, who heads BLM's oil and gas leasing division in Billings, Mont.
Larry Melvin, mineral manager for the U.S. Forest Service in Bismarck, said an "explosion of leasing" of federal grasslands in western North Dakota began in 2004, once an environmental assessment was completed. About 85 percent of some 942,000 acres available has been leased, he said.
Officials estimate each working drill rig in North Dakota accounts for about $2.6 million in annual payroll, and about 40 direct jobs and 80 indirect jobs in the state.
At present, the most productive oil activity in the state is on state and private land in Mountrail, Dunn and Williams counties, in a formation known as the Middle Bakken, said Ron Ness, director of the North Dakota Petroleum Council.
The Bakken has moved farther east than anticipated, and most of the federal parcels are west and south of the more successful oil wells in the Bakken, he said.