Navigating Volatility: Strategic Investment Opportunities in North Dakota's Upstream Energy Sector Amid Stable Rig Counts

North Dakota's oil sector has long been a linchpin of U.S. energy production, but 2025 has brought a paradox: stable rig and frac crew counts amid volatile oil prices. As of September 2025, the state maintains 29 active rigs and 13 hydraulic fracturing crews, a slight dip from June's 32 rigs but consistent with broader industry trends of cautious investmentContinental Resources reports decline in North Dakota drilling due to competition and prices^[5]. This stability, however, masks a complex interplay of market forces, geopolitical risks, and strategic shifts in upstream energy stocks.

Market Context: Rig Counts as a Barometer of Resilience

North Dakota's rig activity reflects a sector adapting to uncertainty. Despite oil prices swinging from $65 per barrel in June 2025—spurred by Middle East tensions—to a projected $53–$56 range for 2026 by Morgan StanleyEnergy Sector Investing 2025: Outlook^[1], operators have maintained steady operations. For instance, NABORS B25 and STONEHAM 17 rigs continue drilling in the Bakken Formation, with operators like KODA RESOURCES OPERATING, LLC and HUNT OIL COMPANY prioritizing efficiency over aggressive expansionSeptember 2025 Current Rigs in North Dakota^[2]. This resilience is partly due to the state's third-place ranking in U.S. oil production, with July 2025 output at 1.172 million barrels per day—a 22,000 bpd decline from earlier in the yearNorth Dakota drilling, fracking activity steady as prices gyrate, state regulator says^[3].

The frac crew count, at 13 crews, has also remained unchanged since JuneEnergy Sector Investing 2025: Outlook^[1], signaling a focus on maintaining existing infrastructure rather than new exploration. This aligns with broader industry trends: U.S. operators are shifting capital toward high-return projects and shareholder dividends rather than “wildcat” drillingContinental Resources reports decline in North Dakota drilling due to competition and prices^[5].

Strategic Positioning: Navigating Volatility in Upstream Energy Stocks

The volatility in oil prices has created both risks and opportunities for investors. While global supply constraints and OPEC+ policies suggest a $70–$90/bbl range for WTI in 2025Energy sector outlook 2025 | Energy stocks^[6], North Dakota's upstream players are uniquely positioned to capitalize on this environment.

1. Resilient Operators in a Shifting Landscape
Companies like Continental Resources and Hess Bakken Investments have demonstrated adaptability. Despite reduced drilling activity due to competition from the Permian Basin and falling pricesContinental Resources reports decline in North Dakota drilling due to competition and prices^[5], these firms are optimizing production from existing wells. For example, Meridian Energy Group's focus on advanced crude oil refining with environmental complianceTop 23 North Dakota's Oil and Gas Companies^[7] and E&M Services LLC's emphasis on operational efficiencyTop 23 North Dakota's Oil and Gas Companies^[7] highlight how North Dakota's operators are balancing profitability with sustainability.

2. Energy Infrastructure as a Hedge
Investors are increasingly turning to energy infrastructure, particularly Master Limited Partnerships (MLPs), which benefit from U.S. natural gas production and exportsEnergy Sector Investing 2025: Outlook^[1]. North Dakota's role in this space is growing, with companies like Missouri Valley Petroleum and Petro Serve USA expanding their logistical networks to support both oil and gas demandTop 23 North Dakota's Oil and Gas Companies^[7]. Natural gas, driven by AI-driven data center growth and EU energy diversificationEnergy Sector Investing 2025: Outlook^[1], offers a secondary revenue stream for upstream firms.

3. Diversification and Long-Term Growth
While oil price volatility persists, diversifying into resilient upstream stocks like ExxonMobil and ConocoPhillips provides a bufferOil Market 2025: Volatility Looms, 3 Resilient Stocks to Watch^[4]. These firms, along with North Dakota-specific players like Diamondback Energy, are leveraging technological advancements to reduce breakeven costs. For instance, Schlumberger (SLB) and TechnipFMC are seeing increased demand for their services in the Bakken, where longer lead times for offshore projects suggest a multi-year growth cycleEnergy sector outlook 2025 | Energy stocks^[6].

Conclusion: A Calculated Approach to North Dakota's Energy Future

North Dakota's oil sector is a microcosm of the broader energy transition: balancing legacy production with innovation. While rig and frac crew counts remain stable, the real opportunity lies in strategic investments that align with both short-term market dynamics and long-term decarbonization goals. For investors, this means prioritizing companies that combine operational efficiency with diversification into natural gas and energy infrastructure. As the state's regulators and operators continue to adapt to a volatile landscape, North Dakota's upstream sector remains a compelling, if cautious, bet.