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Montana may get its first oil rig since December

SIDNEY, Mont. -- They are not a Bakken player, but are looking to drill a well in the Bakken soon. The Mertz Company, a privately held company based in Houston, has an application before the Montana oil and gas commission seeking to drill a well.

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Stacked rigs and other idle oil equipment is seen in a Nabors Drilling yard near Williston, North Dakota April 30, 2016. REUTERS/Andre Cullen/File Photo

SIDNEY, Mont. -- They are not a Bakken player, but are looking to drill a well in the Bakken soon. The Mertz Company, a privately held company based in Houston, has an application before the Montana oil and gas commission seeking to drill a well.

James Mertz of Mertz Energy said drilling right now is still high risk. Even though oil prices are inching up and have crossed the $50 mark, that’s still not really good enough for tight oil plays.

“We are taking a big risk,” Mertz said. “One of our biggest problems is just trucking expenses are very prohibitive, so whatever we can do to lower costs to do more is good.”

James Mertz said because of the high risk, negotiating lower costs will be essential to whether the project can actually move forward in Montana.

Montana hasn’t had a drilling rig since December. In October of 2012, there were about 25.

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North Dakota, meanwhile, has about 25, down from 189 at peak production.

While prices have continued to be much lower than before, many Bakken players have said they will be able to hang in for the long haul.

Among these is ONEOK, which is putting the finishing touches on a new headquarters in Sidney. The company captures natural gas in pipelines and conditions it before sending the fluids on for either sale or further processing, as needed.

They employ about 85 people, and say they have no plans to lay anyone off.

“We needed a complex that could support the growth activities going on here,” said Craig Forsander with ONEOK. “It’s like one-third administration and two-thirds shop/warehouse and yard facilities. It’s really designed to help us keep pace with the producers here and what we need to do to support our customers.”

Oasis Petroleum, meanwhile, is among those still operating drilling rigs in North Dakota. At an Oilfield 101 presentation for REAL Montana, they told the leadership group that it is a common misconception that there are no oilfield jobs now as a result of the downturn.

Not so, says Andy Davison, Midstream Operations Manager for Oasis.

“Maybe drilling rigs are laying down right now, but there are still a ton of good-paying jobs,” he said.

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Oasis runs its own fracking crew and has a midstream component as well. They are building a gas plant, siting compressors and laying a ton of pipeline. They are also still drilling and completing wells in the Bakken, in spite of the downturn. Oasis is among those still hiring people.

“It’s for different disciplines,” Davison said. “If you are a talented mechanic, give me your resume. If you know electrical line work, bring it forward. There are different disciplines needed in a slow down.”

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