Rig count climbs higher in the US, drops in Canada

By Phaedra Friend Troy 

According to the regular report from Baker Hughes (NYSE:BHI), the number of drilling rigs working in the US has risen this week. 

The number of drilling rigs contracted for work in the US increased by 11 this week, to 1,651. This is a substantial jump from the number of rigs working at this time last year, which was only 985 drilling rigs. 

Most likely, ramped up activity in various US shale plays has helped to boost drilling rig numbers, as well as more steady and higher commodity prices for both crude oil and natural gas. Requiring a higher investment to bring to market, developing shale plays necessitates special technologies, such as horizontal or directional drilling and hydraulic fracturing. 

While most of the shale plays are natural gas-bearing, which commands a much lower price, many operators are forced to drill and produce from leases to keep their contracts on the land. Furthermore, some shale plays, such as the Eagle Ford and Bakken also produce oil, which at the current price-point allows for profitable drilling and production. 

On the other hand, the number of land rigs drilling in Canada dropped this week by 16 rigs. While less rigs at 379 this week, the number is still up 215 from this time last year. 

Offshore, the number of rigs increased by one this week to 21 offshore rigs working in US waters. That number is down 32 percent from last year, when the US Gulf of Mexico boasted 31 rigs working at this time. 

The decrease is most likely caused by the current administration’s deepwater drilling moratorium, which has restricted the rigs that can drill in waters offshore the US. Operators have been forced to declare force majeures on the rigs, and many have been moved to other areas of the world.

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