The US drilling rig count decreased during the week ended Aug. 26 for just the second time in 13 weeks, data from Baker Hughes Inc. indicate. However, the tally of oil-directed units was flat and the Permian basin continued its hot streak with a 3-unit increase.
Down 2 units to 489, the overall US count is still 85 units above its total on May 27, just before the recent drilling rebound began. The Permian has added 62 units during that time (OGJ Online, Aug. 19, 2016).
After jumping 152,000 b/d last week, US crude oil production during the week ended Aug. 19 decreased 49,000 b/d to 8.548 million b/d, down 789,000 b/d year-over-year, the US Energy Information Administration reported this week. The Lower 48 declined 55,000 b/d while Alaska added 6,000 b/d.
EIA foresees more declines from US tight oil into next year. In the reference case of its Annual Energy Outlook 2016 published this month, US tight oil output is projected to drop 700,000 b/d between 2015-17 primarily due to low oil prices and resulting investment cuts.
“However, production declines will continue to be mitigated by reductions in cost and improvements in drilling techniques,” EIA said. “The use of more efficient hydraulic fracturing techniques and the application of multiwell-pad drilling, as well as changes in well completion designs, will allow producers to recover greater volumes from a single well.”
Continuing the trend of firms flocking to West Texas’s resilient production hub, meanwhile, PDC Energy Inc. bought its way into the Delaware basin this week, agreeing to take 57,000 net acres for $1.5 billion (OGJ Online, Aug. 24, 2016). The Denver-based firm plans to add 2 rigs to the basin and spud 9 horizontal wells by yearend.
Also reported on Aug. 26, Blackstone Energy Partners LP, an affiliate of multinational private equity firm Blackstone Group LP, said it’s investing in two ventures respectively focused on the Midland and Delaware basins (OGJ Online, Aug. 26, 2016).
Gas, horizontal rigs anchor losses
Two rigs targeting natural gas stopped operations this week, with that count settling at 81. Oil-directed rigs, static at 406, haven’t posted a decline since June.
Onshore rigs also recorded a rare drop as of late, decreasing 2 units to 468. Horizontal drilling rigs lost 3 units to 379, still up 65 units since May 27. Directional drilling rigs, meanwhile, gained 3 units to 48.
With 1 unit offshore Louisiana going offline, the overall US offshore count now stands at 17. Rigs drilling in inland waters increased a unit to 4.
Five states recorded single-unit losses. The count in Texas now totals 237, Louisiana 42, Colorado 20, Ohio 13, and West Virginia 7. The DJ-Niobrara dropped 2 units to 16, while the Eagle Ford, Utica, and Barnett each down 1 unit, now tally 35, 13, and 4, respectively.
Although this week’s increase wasn’t enough to offset losses in Texas and the US, the Permian has risen in 11 straight weeks and in all but 2 of the past 15 weeks. At 199 rigs working, the basin is now down 369 units compared with its peak reached in late 2014.
Wyoming rose a unit to 9. Pennsylvania was the only other state to post a gain, leading the way with a 2-unit rise to 19. The Marcellus increased a unit to 25.
Fresh off last week’s decline, Canada rebounded in a big way this week with a 25-unit jump to 146, up 110 units since May 6. Oil-directed rigs gained 19 units to 84 as gas-directed rigs rose 6 units to 62. As with the recent rise in the US, oil-directed units have accounted for the bulk of Canada’s recent rig count increases.
Contact Matt Zborowski at email@example.com.