N.D. regulators see $28 per barrel as breakeven in key oil county

Wed Oct 15, 2014 2:01pm EDT
 
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Oct 15 (Reuters) - Oil extraction in North Dakota's largest oil-producing county would become economically unfeasible at $28 per barrel, far below the current price, state regulators said on Wednesday.

The forecast, meant to assuage concerns on Wall Street as oil prices fall to two-year lows, is for McKenzie County, which produced nearly 12 million barrels of oil in August.

For Williams County, the second-largest oil producing area in the state, the North Dakota Department of Mineral Resources sees a breakeven point of $37 per barrel. For the state's four-largest oil-producing counties, $42 per barrel was the highest breakeven point.

Crude oil futures are trading at roughly $81 per barrel.

The forecast, in line with previous estimates from state officials, is the point at which production at existing wells could or would cease.

Analysts on Wall Street have generally seen $75 per barrel as the price at which oil producers would consider holding back on drilling new wells. (Reporting by Ernest Scheyder; Editing by Diane Craft)