BHI: Down just 2, US rig count posts smallest decline of 28-week slide

Posting its smallest decline of the now 28 consecutive weeks of losses, the US drilling rig count dropped just 2 units during the week ended June 19 to settle at 857 rigs working, according to data from Baker Hughes Inc.

The decline over the past 6 weeks has averaged a hair more than 6 rigs/week compared with double-digit and near triple-digit declines over the previous 22 weeks. The count has now lost 1,063 units since the week ended Dec. 5 and is down 1,001 year-over-year (OGJ Online, Dec. 5, 2014).

In an energy update released this week, analysts at Raymond James & Associates Inc. noted that 853 well permits were issued last week, down 12 from the prior week, decreasing the 4-week average by 15 to 844. RJA tracks permitting activity as a primary indicator of rig count activity.

“In the context of regular swings in permit data, this decline is not necessarily material,” RJA explained. “While we will continue to keep an eye on the data, we see this as a continuation of recent stability in new permits issued. This stability makes us confident that the indicator has bottomed some time ago. However, the lack of a material upswing seems indicative of what we believe should be a slow recovery in rig activity.”

Lands rigs unchanged

After gaining 2 units a week ago, offshore rigs relinquished 2 units to return to a total of 27. Rigs drilling in inland waters were unchanged at 5.

Land rigs, whose decline has slowed considerably over the past 7 weeks, also were unchanged at 825. Since the week ended May 1, an average of just less than 6 rigs/week has been laid down.

Rigs engaged in horizontal drilling edged down a mere unit, matching their lowest drop of their 30-week slide. At 662, they’re down 588 year-over-year. Directional drilling rigs, meanwhile, were unchanged at 95.

Oil-directed rigs dropped 2 units to 631, down 914 year-over-year. Gas rigs gained 2 units to 223. Rigs considered unclassified were unchanged at 3.

Canada’s rig count has now risen in 4 straight weeks, almost doubling over that time. Its 9-unit increase this week to 136 comprised a 6-unit rise in oil-directed rigs to 74 and a 3-unit rise in gas-directed rigs to 62. Oil-directed rigs have shot up 57 units since May 1. Canada is still down 129 units year-over-year.

Light activity in major states, basins

Oklahoma, Louisiana, and New Mexico reported modest losses to lead the major oil- and gas-producing states, each decreasing 2 units to respective totals of 105, 69, and 43. New Mexico’s total is its lowest since the week ended Aug. 21, 2009.

Wyoming and Ohio each edged down a unit to 21 and 20, respectively. Unchanged from a week ago were Texas at 363, Colorado at 38, West Virginia at 19, Kansas at 13, California at 11, and Arkansas at 5.

North Dakota, Pennsylvania, and Alaska each edged up a unit to respective totals of 77, 47, and 10. Utah led the states with a 2-unit gain to 8.

Contact Matt Zborowski at matthewz@ogjonline.com.

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