BHI: US rig count forced down by large losses in Texas

Forced down by large losses in Texas and specifically the Permian basin, the US drilling rig count plummeted 27 units to settle at 1,893 rigs working during the week ended Dec. 12, Baker Hughes Inc. reported. This week’s decline comes on the heels of sub-$60/bbl crude oil prices on NYMEX (OGJ Online, Dec. 12, 2014).

Land-based oil rigs essentially accounted for the drop. Overall, land rigs fell 28 units to 1,820. Additionally, rigs drilling in inland waters edged down 1 unit to 13. Offshore rigs bucked the trend, gaining two units to 60.

Oil rigs fell 29 units to 1,546, slightly offset by a 2-unit gain in gas rigs to 346. Rigs considered unclassified remained at 1 unit working.

Directional drilling rigs lost 2 units to 196, while horizontal drilling rigs edged down a unit to 1,367.

In Canada, meanwhile, 9 more units came online to reach 431, up 5 compared with this week a year ago. Gas rigs increased 6 units to 216, doubling the 3-unit increase in oil rigs to 215.

Major states, basins

Texas, by far, experienced the largest loss of the major oil- and gas-producing states, relinquishing 24 units to settle at 872 rigs working. That reflected a 20-unit drop in the Permian basin to 548.

Earlier this week, Karr Ingham, economist and creator of the Texas Petro Index (TPI), said upstream oil and gas activity in Texas, as reflected by the TPI, would likely peak later this year or very early in 2015 and enter into a state of decline for some period of time, depending on what happens to crude prices (OGJ Online, Dec. 12, 2014).

The next biggest rig count decline occurred in neighboring Arkansas. Although significantly lower compared with Texas, Arkansas’s 3-unit drop to 9 accounted for a quarter of its previous total. Colorado, losing 2 units to 68, was the only other state to report a multiple-rig loss.

North Dakota, Louisiana, Wyoming, Pennsylvania, and Alaska each edged down a unit to respective totals of 179, 113, 58, 54, 10.

Unchanged from a week ago was Oklahoma at 211 and Utah at 23.

New Mexico edged up a unit to 101. Ohio, California, Kansas, and West Virginia each gained 2 units to 47, 45, 33, and 28, respectively.

In the major US basins, the Granite Wash represented the next largest drop after the Permian, falling 6 units to 57.

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