North Dakota surpassed a milestone in June — its 10,000th shale oil well — amid a still-gloomy outlook for its petroleum industry.

The industry, facing continued low crude oil prices, is finishing off previously drilled wells to get oil and some revenue flowing and to meet regulated completion timetables, state officials said Friday. But the number of rigs drilling new wells declined again.

Oil producers using hydraulic fracturing completed 149 oil wells in the Bakken or Three Forks plays in June, bringing the total to 10,113. The state also has more than 2,700 legacy wells from before the shale boom.

The new wells increased June's crude oil output to 1.21 million barrels per day, up 0.7 percent over May, a pace that North Dakota officials hope can be sustained to keep oil tax revenue flowing over the next two years.

But Lynn Helms, director of the state's Division of Mineral Resources, said things could get worse.

"Either we are going to have to see some better prices or we are going to see further contraction in the oil and gas industry," he said on a conference call with reporters for the monthly release of production data.

The benchmark crude price has declined to $42 per barrel, after rallying in June to $60. North Dakota's crude oil trades at a discount to the Oklahoma benchmark because of the higher cost of shipping most of it by rail. Helms said Friday's North Dakota wellhead price estimate was $28.50 a barrel, down nearly $11 from last month.

More deadlines ahead

Helms said producers are finishing previously drilled wells to meet a one-year state completion deadline. That surge had been expected, and Helms said another bump is likely in late 2015 and early 2016, as other wells reach their deadlines.

The number of rigs boring new wells in North Dakota is down to 74 in August, a third of the rig count at the peak in May 2012. That trend could continue if prices keep falling.

Continental Resources, the largest oil producer in North Dakota, said last week that it has 10 drilling rigs in the Bakken, but is prepared to cut the number by 20 percent if low prices persist.

Continental CEO Harold Hamm said he doesn't see the company increasing production until the market rebalances. "These reserves and these resource plays are not going anywhere and we all have a long future, and that's kind of the way we look at it here," he told analysts on a conference call.

North Dakota hit another record in June — 1.6 billion cubic feet of natural gas per day. But the announcement came just two days after a major potential customer, cooperative CHS Inc. based in Inver Grove Heights, dropped its plan for a $3.3 billion Spiritwood, N.D., fertilizer plant. It would have consumed 90 million cubic feet of gas daily. CHS canceled the project because of rising costs, and invested in a large Illinois-based fertilizer producer instead.

"It is a pretty serious blow," Helms said of the dead project.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib