BHI: Pushed down mostly by gas, US rig count drops 13 units

Gas-directed rigs represented most of the decline in the US rig count for the second consecutive week, giving up 8 of the 13 total units to go offline during the week ended Jan. 22, according to Baker Hughes Inc. data (OGJ Online, Jan. 15, 2016).

The overall rig count, now at 637, is down 996 year-over-year and the lowest since Aug. 13, 1999.

Sixty-five gas units have gone offline since Dec. 4. Now totaling 127, gas units are easily at their lowest level in BHI data dating back to July 1987. They’re also down 189 year-over-year.

In the midst of impending budget cuts and more planned layoffs, Marcellus- and Fayetteville-focused shale gas producer Southwestern Energy Co. reported this week that it had no drilling rigs operating at the start of 2016 (OGJ Online, Jan. 21, 2016). That’s down from the previously reported 11-12 during fourth-quarter 2015.

Last week, BHP Billiton Ltd., a major stakeholder in US shale gas, said it plans to reduce its operated rigs onshore US from 7 to 5 in the first quarter (OGJ Online, Jan. 15, 2016). It operated 26 rigs onshore US only a year ago.

Elsewhere, the American Petroleum Institute reported this week that US oil and gas well completions in fourth-quarter 2015 fell 51% from the total of the comparable quarter a year earlier (OGJ Online, Jan. 22, 2016). Estimated development oil well completions were down 55%, and development gas well completions, down 37%.

For 2015 relative to 2014 levels, total well completions were down 35%. Oil well completions were down 37%, and gas well completions, down 28%.

Oil-directed rigs still falling

Representing the other 5 units to go offline this week, oil-directed rigs now total 510, down 807 year-over-year and the lowest since Apr. 16, 2010.

Land-based rigs dropped 16 units to 607, down 961 year-over-year. Rigs engaged in horizontal drilling fell 11 units to 500, down 729 year-over-year and their lowest total since Oct. 30, 2009. Directional drilling rigs lost 2 more units to 60.

Four rigs came online offshore Louisiana, partially offset by 1 going offline in Alabama waters, bringing the US offshore total to 29. One rig remains operating in inland waters.

Canada’s rig count continued its upward momentum with a 23-unit increase to 250, up 167 over the past 3 weeks but still down 182 year-over-year.

The rise was again bolstered by oil-directed rigs, which gained 24 units to 134, down 93 year-over-year. Oil rigs have jumped 122 units in the last 3 weeks alone. Gas rigs in Canada, meanwhile, edged down a unit to 116.

One of several North American firms in recent weeks to report cutbacks on exploration and production activity in 2016, Husky Energy Inc. this week said it will defer drilling in western Canada as part of its downwardly revised guidance for the year (OGJ Online, Jan. 21, 2016).

Slide continues for Texas

In the major oil- and gas-producing states, Texas led all this week with a 7-unit loss to 294, down 459 year-over-year and its lowest count since Mar. 31, 2000.

The Eagle Ford led the state with a 4-unit decline to 64, down 117 year-over-year. It was followed by a 3-unit drop in the Permian to 199, down 282 year-over year; and 1-unit loss in the gas-focused Barnett to 4.

Pennsylvania decreased 3 units to 23, down 30 year-over-year and its lowest count since Feb. 6, 2009. The Marcellus fell 3 units to 35, down 41 year-over-year.

North Dakota, New Mexico, and Kansas each declined 2 units to 45, 30, and 10, respectively. North Dakota's count, down 102 units year-over-year, is the state's lowest since Aug. 21, 2009. The Williston fell 2 units to 45. New Mexico's count, down 59 year-over-year, is the state's lowest since Apr. 24, 2009.

California edged down a unit to 7.

Six states were unchanged from a week ago: Oklahoma at 87, Louisiana at 54, Colorado at 20, Wyoming at 15, West Virginia at 12, and Utah at 3. The gains offshore Louisiana were offset by a 5-unit dive in the Haynesville to 18. The Mississippian dropped 2 units to 10. The Cana Woodford rose 2 units to 39.

Ohio edged up a unit to 14, as did the Utica. Alaska led all with a 2-unit rise to 11.

Contact Matt Zborowski at

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