North Dakota’s oil price has dropped to a seven-year low, and operators are drilling fewer new wells, portending future declines in production, the state’s Mineral Resources Department reported Wednesday.

“We are looking at a lot of belt tightening and we are looking at it to continue through the entire first half of 2016,” Lynn Helms, director of the regulatory agency said on his monthly Director’s Cut conference call with reporters.

In October, however, oil production in North Dakota rose 0.6 percent to nearly 1.17 million barrels per day compared with September, but that’s down from the peak of 1.23 million barrels last December.

Helms said that upward blip partly resulted from North Dakota producers selling oil in advance of last Friday’s meeting of Organization of the Petroleum Exporting Countries (OPEC). The decision at that meeting to maintain production levels further sank oil prices.

“They were trying to move and sell as much as they could ahead of the OPEC meeting,” said Helms, who expects prices won’t recover for months.

North Dakota producers get less than the domestic benchmark price for crude oil because they lack sufficient pipeline capacity to economically ship out of state, and rely on more-expensive rail to export nearly half their output.

The upward production blip in October oil production was due to producers selling in advance of an important OPEC meeting on Dec. 4 in Austria.

Helms said the current estimated North Dakota wellhead price — $27 per barrel — is the lowest since December 2008.

That price, which is calculated from a Minnesota refinery’s posted data, is nearly $10 less than the benchmark West Texas Intermediate price set at a major oil terminal in Cushing, Okla.

Just 65 drilling rigs are operating in North Dakota, down two-thirds from a year ago, and near a seven-year low, according to data released Wednesday.

Another 10 drilling rigs are expected to stop operating sometime in 2016 in the face of persistent low oil prices, Helms said.

Further declines

That pace of drilling likely will result in further declines in North Dakota oil production, Helms said. But he doesn’t expect output to drop below 1 million barrels per day — a symbolic threshold that North Dakota achieved in April 2014.

The top five oil producers in North Dakota all reported net losses for the third quarter. In another sign of troubles, 15 operators have sold 662 producing wells to new investors, according to data released Wednesday by North Dakota regulators.

In the largest of the deals, 392 wells were sold by Occidental Petroleum Corp. which is exiting the state, to Lime Rock Resources III-A L.P., a private equity firm. Both are based in Houston.

In other major deals, Whiting Oil & Gas Corp. of Denver sold 122 wells to investor groups; Corinthian Exploration, based in Calgary, sold 92 wells; and American Eagle Energy Corp., a Littleton, Colo.,-based operator that filed for Chapter 11 bankruptcy in May, sold 87 wells.

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