Oil rigs shed just 12 units, also its smallest decline in 15 weeks.
The overall count has now fallen in 16 consecutive weeks, during which time it has plunged 872 units (OGJ Online, Dec. 5, 2014). The total of 1,048 is the lowest count since the week ended Oct. 23, 2009, and 761 fewer units compared with this week a year ago.
The slowed decline comes following analysis last week from Raymond James & Associates Inc. that said the decline’s pace has “far exceeded” RJA’s original expectations, which saw a March average of 1,485 units. The average for the first four weeks of March is 1,109.
RJA also noted that weekly permit activity had shown an increase during the previous week when 911 new well permits were issued, raising the 4-week average to 900. That’s up from a low of 827 in the 4-week average about three weeks ago—the lowest since 2009.
“While it is important to keep in mind the volatility of this data point, at face value this seems to indicate that the rig count should see a bottom in the next two to three months,” RJA said.
Chesapeake Energy Corp. this week said, however, it plans to operate just 25-35 rigs in 2015, which is a decrease of 55% from an average of 64 rigs in 2014 (OGJ Online, Mar. 24, 2015). Also this week, PIRA Energy Group said in an Energy Market Recap that US shale oil production will flatten and slightly decline during the second quarter (OGJ Online, Mar. 25, 2015).
More US offshore rigs go offline
After an 11 unit drop last week—its largest 1-week decline since the week ended June 4, 2010 (OGJ Online, Mar. 20, 2015)—offshore rigs lost 3 more units to settle at a total of 34. That’s its lowest total since the week ended Nov. 4, 2011.
Rigs drilling in inland waters, meanwhile, down 6 units last week, gained 2 units to 4. Land rigs were down 20 units to 1,010.
Oil rigs now total 813, down 762 units since Dec. 5 and 674 units year-over-year. Gas rigs dropped 9 units to 233. Rigs considered unclassified were again unchanged at 2.
Rigs engaged in horizontal drilling lost 17 units to 813. Since Nov. 21, 560 horizontal units have gone offline. Rigs drilling directionally, meanwhile, were unchanged at 92.
After losing 80 rigs in each of the previous two weeks, Canada merely shed 20 units during the week to settle at 120. That total is still down 178 units year-over-year and more than 70% since the country had 440 units at week ended Jan. 16.
Of the 20 units lost, oil rigs comprised 12 to a total of just 18 while gas rigs comprised 8 to 102. Canada’s 18 oil rigs are its fewest since the week ended May 1, 2009. During the week ended Jan. 31, 2014, Canada had 404 oil rigs working.
The Conference Board of Canada said in a report this week that it expects the Canadian oil industry to shed nearly 8,000 jobs this year as revenues fall by $43 billion (Can.) in response to the plunge in oil prices (OGJ Online, Mar. 26, 2015).
Major US states, basins
A rarity during the US rig count plunge over the last 16 weeks, Texas didn’t clearly stand above the other major oil-and gas-producing states in losses. While its 3-unit drop to 462 represents the state’s 18th straight week in declines, it’s also the state’s smallest during that period dating back to the week ended Nov. 21.
Reflecting the modest decline in Texas, the Permian merely shed 2 units to 290, representing the basin’s smallest decline in 16 weeks. The Eagle Ford edged down a unit to 137.
Last week’s second place state in losses, Louisiana, also lost 3 units to settle at 72. That total, along with the state’s 40 land rigs, is still easily the state’s fewest on record dating back to January 2000. Reflecting Louisiana’s loss, the Haynesville shed 2 units to 32.
Oklahoma and Alaska each fell 3 units as well, settling at 133 and 12, respectively.
North Dakota, New Mexico, Colorado, and California each lost 2 units to 96, 51, 37, and 12, respectively. The Niobrara and Williston respectively fell 3 and 2 units to 30 and 97. Wyoming edged down a unit to 28.
Unchanged from a week ago were Ohio at 28, West Virginia at 21, Arkansas at 9, and Utah at 8.
Up a unit apiece, Pennsylvania and Kansas now total 51 and 13, respectively.
Contact Matt Zborowski at email@example.com.