BHI: US rig count up 6 in second straight week of gains

The overall US drilling rig count increased for the second consecutive week, perhaps signifying the beginning of a light rebound in wake of a year-and-a-half-long drilling dive.

Baker Hughes Inc.’s tally of active rigs gained 6 units to 414 during the week ended June 10. Last week, the count rose for the first time since Aug. 21, 2015, the conclusion of a short-lived summer rebound in which the count rose to 885 on Aug. 21 from 857 on June 19 (OGJ Online, June 3, 2016).

BHI also reported this week that the US rig count for May averaged 408 rigs working, down just 29 units from April and down 481 units from May 2015.

In addition to last week’s first weekly rig-count rise in months, US crude oil production increased for the first time in 13 weeks, gaining 10,000 b/d to 8.745 million b/d during the week ended June 3, the US Energy Information Administration reported. The new total is still down 865,000 b/d year-over-year.

Even with the stabilization seen in recent weeks, EIA’s latest outlook for crude oil prices “is expected to limit [US] onshore drilling activity and well completions, despite continued increases in rig and well productivity and falling drilling and completion costs.”

In its June Short-Term Energy Outlook, the agency forecasts Brent crude prices to average $43/bbl in 2016 and $52/bbl in 2017, up $3/bbl and $1/bbl, respectively, from forecasts in last month’s STEO (OGJ Online, June 7, 2016). EIA projects rig-count declines will continue to limit US crude production through 2017.

US oil, gas rigs split gains

The US oil-directed count has strung together consecutive weekly increases for the first time since August 2015. Rising 3 units to 328, the count is now down 1,281 units since a peak in BHI data on Oct. 10, 2014.

Gas-directed units also were up 3, reaching 885 rigs working and marking their first consecutive weekly increase since last October-November.

All 6 units to come online this week were land-based, bringing that total to 388. Rigs engaged in horizontal drilling jumped 4 units to 323, while directional drilling rigs edged up a unit to 45.

The tallies of offshore rigs and those drilling in inland waters each remained unchanged at 21 and 5, respectively.

Texas and North Dakota led the major oil- and gas-producing states each with 2-unit increases to respective totals of 178 and 24. For North Dakota, this week’s activity marked the state’s first increase since last November.

Reflecting the activity in those states, the Eagle Ford, Williston, and Granite Wash each added a unit, reaching tallies of 30, 24, and 7, respectively.

Oklahoma, Ohio, Alaska, and Utah each gained a unit to respective totals of 58, 12, 9, and 4. Alaska’s onshore count has doubled to 8 over the last 2 weeks.

A 2-unit increase to 5 in the Mississippian helped offset a 2-unit drop to 24 in the Cana Woodford and 1-unit decline to 2 in the Arkoma Woodford. The Utica also was up a unit to 12.

The Haynesville also posted a 2-unit rise, reaching 17 rigs working.

Pennsylvania was the only major state to record a decrease, edging down a unit to 13. That reflected a 1-unit drop in the Marcellus to 23.

Fresh off an agreement that will expand its Marcellus acreage, meanwhile, Antero Resources Corp. says it plans in this year’s second half to add another rig to focus primarily on Tyler County, W.Va., where the firm is consolidating newly acquired acreage with existing acreage (OGJ Online, June 10, 2016).

Global activity shifts

Canada’s rig count during the week ended June 10 made its biggest leap since Jan. 15, gaining 24 units to 65. The oil-directed count more than doubled, adding 16 units to reach 29. Gas-directed rigs represented the other 8 and now total 36. The country had 250 rigs working overall on Jan. 22.

For the month of May, the Canadian count averaged 42, up 1 unit from April and down 38 units year-over-year.

The worldwide rig count for May averaged 1,405, down 19 units from April and down 722 units from May 2015. Outside North America, Latin America recorded the only monthly decline, falling 15 units in May from its April total to 188 rigs working, down 139 units year-over-year.

Venezuela fell 9 units to 60, down 8 year-over-year; Brazil shed 4 units to 15, down 28 year-over-year; and Argentina dropped 2 units to 71, down 33 year-over-year. The region’s monthly losses were slightly offset by a 3-unit gain in Colombia to 5—its first monthly increase since last August but still down 19 units year-over-year.

The Asia-Pacific region, meanwhile, jumped 11 units to 190, now down 27 units year-over-year. Offshore China led the way with a 5-unit rise to 31, up 6 year-over-year. Indonesia, Thailand, and Malaysia each increased 2 units to 19, 15, and 6, respectively.

The Middle East rose 7 units to 391, down 7 year-over-year. Pakistan posted a 4-unit gain to 27, up 7 year-over-year; and Kuwait added 3 units to reach 43, down 5 year-over-year. Egypt dropped 2 units to 28, down 8 year-over-year.

Europe increased 5 units to 95, down 21 year-over-year. The monthly rise was primarily facilitated by a 4-unit jump in Sakhalin to 10. Activity was mostly static in Africa, where an average of 1 more unit operated in May, bringing the continent’s average to 91, down 9 year-over-year.

Contact Matt Zborowski at matthewz@ogjonline.com.

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