CHICAGO — Oil-rich North Dakota snagged a coveted AAA rating from Standard & Poor's Friday.
The news came as the state's oil regulators announced that production has reached an all-time high, at 940,000 barrels a day, from the Bakken oil field. The state could pass one million barrels a day by 2014, the state said. Only Texas generates more oil.
"The upgrade is based on the state's very strong financial results and financial position," Standard & Poor's analyst Henry Henderson said in a release.
The upgrade boosts the state's issuer credit rating to AAA from AA-plus. The state's appropriation debt and moral obligation debt was upgraded to AA-plus and AA, respectively.
"In our view, North Dakota's stability throughout economic cycles has long been a positive credit factor, and performance through the recent recession was stronger than nearly all state peers," Henderson wrote. "The state's economic performance, spurred by oil drilling in the Bakken region in the western area of the state, has contributed to a structurally balanced budget in recent years and the expectation of surplus operations through the current biennium."
North Dakota enjoys the lowest unemployment rate in the country, at 3%. Oil and gas tax revenues have contributed to strong state coffers, and the state ended fiscal 2012 with a general fund balance of $2.9 billion, a $1.5 billion increase from the previous year.
The state faces a risk that it could see reductions in federal fund, and Standard & Poor's said it would continue to monitor the possibility.