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Oilfield deals clip oil and gas budgets, drilling – N.Dakota official

Oil and gas deals are chipping away at drilling budgets in North Dakota, the third-largest U.S. oil producing state, and likely will erode future production, a state official said on Friday.

North Dakota’s output fell 2,000 barrels-per-day (bpd) to 1.13 million bpd in May over April, according to data from the state’s Industrial Commission, which oversees oil and gas resources.

“Growth is slower than one would think at $74 (per barrel) oil,” said Lynn Helms, director of the North Dakota Department of Mineral Resources (DMR).

Mergers and acquisition are disrupting budgets and impacting rig counts, Helms said at a press briefing.

Rig counts, an indicator of future production, have averaged 35 so far in July, flat to the previous month, according to data from Baker Hughes BKR.O, while prices have climbed 5%.

U.S. West Texas intermediate crude futures settled at $75.42 on Friday, buoyed in recent weeks by top producer Saudi Arabia’s plans to curb production.

Bakken light sweet crude was trading at a $2.56 premium to U.S. crude futures, according to the DMR.

Chord Energy Corp CHRD.O last month agreed to buy assets in the Williston Basin, spread across North Dakota, South Dakota and Montana, from Exxon Mobil XOM.N for $375 million.

Ovintiv OVV.N in April agreed to sell its assets in North Dakota’s Bakken to privately held Grayson Mill Bakken for about $825 million, while Kraken Oil and Gas of Houston acquired all the well interests of Bowline Energy last year.
Source: Reuters (Reporting by Arathy Somasekhar in Houston; Editing by Will Dunham)

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