There Are Now Zero Drill Rigs Working in Montana, Here’s Why…
Lower oil prices are cutting deep into the activity of Montana’s oil and gas industry and could soon impact the economy in a big way. To highlight the effect of the downturn, Dave Galt, the Executive Director of the Montana Petroleum Industry, pointed out that as of April 23, 2015, the last oil rig drilling in Montana went off-line.
"Over the past four years or so, we've been inching up with our oil production in Montana, and we've been running about 12 to 13 rigs, pretty stable for the past few years. As the price declined in late 2014, new well drilling in Montana is stopped right now, really, with zero rigs drilling zero new wells."
These drill rigs dig can drill anywhere between eight and twelve new wells per year, and with each new well comes a sizable economic impact. To put that into context, Galt points to a study titled "The Economic and Fiscal Impacts of Montana's Oil and Gas Industry" where MSU Economist Dr. Scott Rickard highlights the economic benefits of a single well.
"[An] additional productive well increases Montana's gross output by $9 million, adds $3.6 million to Montana GDP, and produces an additional $1.5 million in wages while supporting 33 additional jobs."
According to Galt, the number of Montana oil rigs dropped from 13 to zero in just nine months, he says the disappearance of the rigs will lead to production declines by the late months of 2015.