BHI: US oil rigs jump 11 units, extend hot streak to 23 weeks

The overall US rig count’s streak of consecutive weekly increases reached 23 during the week ended June 26, reflecting a continued surge in oil-directed rigs and more drilling in Oklahoma and North Dakota.

Baker Hughes Inc.’s tally of active rigs gained 8 units to 941, now up 537 units since a low point in recent BHI data during May 20-27, 2016, and its highest level since Apr. 24, 2015. Over the past 23 weeks, the count has risen 282 units. Since May 20-27, 2016, it has increased in all but 5 weeks (OGJ Online, June 16, 2017).

Also up in 23 straight weeks, oil-directed rigs jumped 11 units this week to 758, up 236 units since May 27, 2016, and their highest point since Apr. 17, 2015. Gas-directed rigs dropped 3 units to 183, still up 102 units since Aug. 26, 2016.

Onshore rigs added 7 units and now total 915, while rigs drilling in inland waters gained 1 unit to 4. Rigs engaged in horizontal drilling increased their share of overall active units with a 10-unit climb to 792, up 478 units since May 27, 2016. Rigs drilling directionally rose another 3 units to 72.

According to data from the US Energy Information Administration, US crude oil production during the week ended June 16 gained 20,000 b/d to 9.35 million b/d. A 25,000-b/d increase from the Lower 48 was slight offset by a 5,000-b/d decline from Alaska.

As drilling and production continue to gain steam, ESAI Energy forecasts that US shale oil production by yearend will reach 5.6 million b/d, up more than 1 million b/d compared with the yearend 2016 average (OGJ Online, June 21, 2017).

However, the research and forecasting firm believes the pace of growth will slow in 2018 as current oil prices below $50/bbl are likely to constrain the upward rig count momentum, with production forecast to be about 500,000 b/d higher in 2018 from the 2017 average.

Offshore production, meanwhile, is recovering after some Gulf of Mexico operations were evacuated this week due to the threat of the former Tropical Storm Cindy.

The US Bureau of Safety and Environmental Enforcement at midday June 22 reported that 288,186 b/d, or 16.5% of gulf oil production, was shuttered because of the event. Only 1 rig at the time was evacuated while 39 platforms were evacuated.

BHI shows this week’s US Gulf of Mexico count unchanged at 22 and the overall US offshore count, including the 1 rig working off Alaska, unchanged at 23.

Latest Oklahoma, North Dakota increases

The Oklahoma rig count has gradually climbed over the past year as interest picks up in regions such as the STACK and SCOOP. The state this week gained 5 units to 132, up 78 units year-over-year from its recent low in BHI data.

The Granite Wash, which stretches from the Texas Panhandle into western Oklahoma, collected 2 units to 12. The Cana Woodford rose 1 unit to 60, up 36 units year-over-year. The Ardmore Woodford gained its only active unit. The Mississippian lost 1 unit to 7.

Slower to recover than the other major states and regions, North Dakota and its Williston basin, home of the Bakken, increased 3 units to 52, up 30 units since May 27-June 3, 2016.

With the 1 rig starting operations in its inland waters, Louisiana rose 2 units to 67. Colorado and California each increased 1 unit to 37 and 11, respectively. The DJ-Niobrara was up 1 to 28. Colorado has risen 20 units since last Oct. 28.

New Mexico and Utah each declined 1 unit to 60 and 8, respectively. Alaska was down 2 units to 5.

While Texas’s rig count has been largely unchanged over the last few weeks, the Permian managed to add 1 more unit to bring its total to 369, up 235 since May 13, 2016.

Canada’s count increased for a sixth straight week, rising 11 units to 170, up 90 units since May 12. Oil-directed rigs climbed 7 units to 98 while gas-directed rigs collected 4 units to 72.

Contact Matt Zborowski at matthewz@ogjonline.com.

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