E&P Increase: North American rig count jumps by 100-plus

By Phaedra Friend Troy

The number of rigs working in North America jumped by more than 100 rigs this week, according to a report from Baker Hughes (NYSE:BHI).

In the US, the number of rotary rigs increased by 12 this week. An increase of 630 rigs year over year, the number is boosted primarily by increased activity onshore the US.

Ten more drilling rigs were contracted for work onshore the US this week, with the most going to Texas, which has 727 rigs working in it. Louisiana has 183 drilling rigs working there, an increase of 5 during the week. North Dakota and Oklahoma have the same number of rigs contracted at 137. Some state lost rigs.

In the US Gulf of Mexico, there was an increase of one rig, taking the number of rigs working in US waters to 20. At this time last year, there were 33 offshore rigs working in US waters. The marked decrease in offshore rigs is attributable to the deepwater drilling moratorium instituted by the DOI and BOEM, as well as delayed shallow-water drilling permits.

Experiencing the largest bump in rigs contracted, the number of rotary rigs working in Canada increased by a whopping 90 this week to 403 units. In addition to being an impressive weekly increase, this is 164 more rigs than this time last year. Canadian E&P activity is supported largely by oil sands and shale developments.

Drilling activity has been supported onshore North America by an increase in shale exploration and development. From the Niobrara to the Marcellus, the Utica to the Eagle Ford, as well as the Bakken, Permian Basin and Haynesville, shale and unconventional natural gas drilling has skyrocketed.

According to a report from Wood Mackenzie, mergers and acquisition expenditures in the US Shale gas reached $21 billion for the first half of 2010 alone.

Supporting this, most of the rigs in North America are drilling for natural gas at 971 rigs. Nearly 530 of the wells being drilled are vertical, 213 are directional, and 929 of the wells being drilled this week are horizontal.

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