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North Dakota exploration and production activity moved slightly lower after a steady string of modest gains, state data published Monday show.
State data show 34 rigs actively exploring for or producing oil and gas as of Monday, one less than reported last week. Rigs counts are a loose metric gauging optimism in the energy sector and last week was characterized by wide intra-day swings in crude oil prices as investors took stock of earnings and economic data released last week.
Short-term movements in oil prices were fueled by comments from the Organization of Petroleum Exporting Countries that demand for oil would increase during the latter half of the year. On Friday, oilfield services company Baker Hughes, which also provides data for the industry, reported a net increase in North American exploration and production activity, though most of that was from a Canadian oil sector returning to normal activity after May wildfires closed down much of its production.
Even with oil prices down from last year, energy companies are spending more. Sanchez Energy, which focuses on Texas shale, said it aims to increase its spending on exploration and production this year by as much as $50 million, though output would stay relatively stable for the year.
Last week, Continental Resources, one of the largest stakeholders in the Bakken shale oil reserve in North Dakota, said net production was down 11 percent from the previous quarter, but it expected more output in the coming months.
Monday’s rig count is down more than 50 percent from this date in 2015. North Dakota oil production in May, the last full month for which the state published data, was 15 percent lower than the all-time high reached in December 2014.
North Dakota Gov. Jack Dalrymple has called on state leaders to find ways to cut costs given the lower cycle for the oil market. Without a course correction, the state estimates its general fund will be short about $310 million by the end of the current biennium.