The rig count keeps going down in North Dakota, and it is going to get lower and stay down longer than previously thought, according to comments Friday by the state’s oil/gas regulator.

North Dakota’s rig count is now 32, the lowest it has been since early 2007, falling from 40 in February and 52 in January.

“It’s headed below 30, based on the estimates from oil/gas operators and what they’re planning to do with drilling rigs the rest of the year,” said Lynn Helms, director of the state Department of Mineral Resources, which includes oil/gas oversight.

Helms said companies are talking about dropping their average rig counts further this year. “It is almost certain that we are going to drop two more rigs,” he said. In response to questions during a webinar, he said oil prices would need to get above $60/bbl to reverse the decline, and even then it would take 12 to 15 months for the numbers to start upward again.

Friday’s report showed oil prices moved up from a low of $18.07/bbl in February to $26.25/bbl for Bakken sweet crude, but Helms said for inactive wells to be brought back, WTI prices need to be $40-45/bbl, and for uncompleted wells to be finished would required $50-55/bbl prices. “We’re a long way to working our way into that uncompleted well inventory,” he said.

“Drilling rigs won’t move until we get above $60/bbl WTI, and even at that companies are saying they will need a full quarter at those prices or above that level, and then once they are confident prices are going to hold, they need 12 months to raise the capital for new drilling,” Helms said. “In essence, it is a year-and-a-half to two-year cycle to get more rigs back.”

North Dakota’s peak rig count was 218 in May 2012; there were still 180 rigs operating 18 months ago when the oil price free-fall began, Helms said.

For January, oil production dropped to 34.7 million bbls (1.12 million b/d), compared to 35.7 million bbls (1.15 million b/d) in December last year, while natural gas dropped to 50.7 Bcf (1.63 Bcf/d) in January, compared to 51.8 Bcf (1.67 Bcf/d) the previous month.

Helms said natural gas storage is the highest he has ever seen at 41.5% above the five-year average, and prices are some of the lowest, going down 67 cents/Mcf at Northern Border Pipeline in Watford City to $1.12/Mcf in January. Meanwhile flared gas in the state is down to 13% with an 87% gas capture percentage.

The start of the Oneok 200 MMcf/d Lonesome Creek gas processing plant is the single-biggest reason why the flaring volumes are continuing to come down, Helms said.