Buoyed by respective rises in natural gas-directed and offshore rigs, the US drilling rig count gained 2 units during the week ended June 26 to reach 859 rigs working, marking its first increase in 29 weeks, according to data from Baker Hughes Inc.
The last rise occurred during the week ended Dec. 5, 2014, and the count has since plunged 1,061 units (OGJ Online, Dec. 5, 2014). Since this week a year ago, the count is down 1,014 units. During the last 7 weeks, the count has averaged a decline of a mere 5 rigs/week.
Analysts at Raymond James & Associates Inc. noted in an energy update this week that 1,030 new well permits were issued last week, representing the highest total since the first week of February.
During the previous 18 weeks, the average number of permits issued each week was just 852. Utilizing a 4-week average, permits issued rose by 53 compared with the prior week.
“While it is hard to come to much of a conclusion based on a single week of data, this is definitely a material change, considering the stability in permits issued seen over the last couple of months,” RJA explained. “This does, however, make us more confident that we are likely seeing the bottom in the rig count right now.”
Gas-directed, offshore rigs spur rise
Gas-directed rigs shot up 5 units to 228. Oil-directed rigs, however, declined for the 29th straight week, relinquishing 3 units to 628. Oil-directed rigs are now down 930 year-over-year and 981 since a recent peak during the week ended Oct. 10, 2014.
Offshore rigs edged up a unit to 28 while rigs drilling in inland waters gained 2 units to 7, more than offsetting a 1-unit drop in land rigs to 824. Land rigs are now down 976 year-over-year.
Rigs engaged in horizontal drilling lost 8 units to 654, down 609 year-over-year and marking 31 straight weeks of losses. Horizontal units were down merely a unit last week. Directional drilling rigs, meanwhile, gained 3 units to 98.
A 4-week rally in Canada’s rig count ended with a 1-unit decline this week to 135. Oil-directed rigs, however, continued their hot streak, adding 2 units to reach 76, still down 65 year-over-year. Oil-directed rigs have posted gains in 7 straight weeks, during which time they have risen by 60. Gas-directed rigs fell 3 units to 59. Canada is down 101 units overall compared with this week a year ago.
Louisiana leads states
Louisiana led the major oil- and gas-producing states with a 6-unit jump to 75 comprising 5 land rigs—including 1 in the Haynesville—along with 1 offshore rig. Notably this week, Goodrich Petroleum Corp. reported it was completing two Tuscaloosa Marine shale wells, and the company expects production within 2 weeks in Tangipahoa Parish, La.
New Mexico and West Virginia were the only two other states to report gains, each edging up a unit to 44 and 20, respectively.
Most states were unchanged from a week ago. Oklahoma remains at 105, Pennsylvania at 47, Colorado at 38, Wyoming at 21, Kansas at 13, California at 11, Alaska at 10, Utah at 8, and Arkansas at 5.
Texas lost 2 units to 361, down 528 year-over-year. The Permian dropped 2 units to 231, down 323 year-over-year, and the Eagle Ford lost a unit to 103, down 111 year-over-year. North Dakota and Ohio led the states in losses, dropping 3 units each to 74 and 17, respectively, pushed down by 3-unit losses in each of the Williston and Utica to respective totals of 74 and 19. North Dakota’s total is its lowest since the week ended Jan. 22, 2010.
However, relief may be on the way for the Williston. WPX Energy Inc. reported plans this week to increase its Williston activity by resuming completions in August and increasing its rig count to 3 by yearend.
Contact Matt Zborowski at [email protected].
