Oil prices have been cut in half, and so has North Dakota's budget.

A drastic drop in the oil market has carved a $4 billion crater in the state's budget plans, according to the revised revenue forecast the state issued Thursday.

Instead of $8.3 billion in revenue oil and tax revenue the state had expected to collect in the 2015-2017 budget cycle, the revised projection -- reflecting much lower oil prices and an increasing number of oil rigs suspending their operations -- is $4.2 billion. Oil production is expected to hold steady at 1.2 million barrels a day pumping out of the Bakken shale formation.

The revised forecast is built on the assumption that there will be an average of 53 fewer oil rigs in production each month -- 135 rigs instead the 188 that were operating last year -- at a loss of $250,000 in state sales tax per well. 

Fewer wells mean fewer workers, and the forecast knocked $35 million out of the budget to reflect the loss of high-paying jobs in the oil patch. Oil royalties drop by $4.9 billion in this forecast, corporate income tax collection drops by a third and individual income tax collections drop as workers lose jobs or find lower paying work.

The budget Gov. Jack Dalrymple unveiled in December hinged on oil selling for between $72 and $82 a barrel through 2015-2017 budget cycle. But as oil prices plummeted, so did the state's expectations.

A revised state revenue forecast, presented to the North Dakota Legislature on Thursday, is based on the expectation of $42-per-barrel oil through the end of the current budget cycle and on oil prices selling in the range of $45 to $65 a barrel throughout the 2015-2017 biennium. 

North Dakota's revised forecast: