Rig counts drop in the US, Canada

By Phaedra Friend Troy

While both the United States and Canada are experiencing increased oil and gas drilling activity in 2011, the number of rigs actively drilling in the countries dropped this week according to oilfield services firm  Baker Hughes (NYSE:BHI)

With 1,939 active drilling rigs in North America, the US boasts the lion’s share with 1,772 of those rigs – with 1,727 working onshore, 19 in inland waters and 26 rigs working offshore. 

Nearing the one-year anniversary of the Deepwater Horizon accident, there are 26 offshore rigs active in the US Gulf of Mexico, less than half the number of rigs drilling a year ago. A combination of the deepwater drilling moratorium and delayed drilling permits has drastically slashed the number of rigs working in American waters. Nonetheless, the Bureau of Ocean Energy Management, Regulation and Enforcement has been actively reviewing and approving new deepwater permits, with the first 10 let in the last few weeks. 

Onshore the US, the number of rigs has jumped over the last year, increasing by 206 units year over year based on increased activity in the various shale plays and unconventional formations across the nation. This week, however, the number of rigs actively drilling onshore the US fell by eight units. 

The biggest drop was seen in Texas, which lost 12 rigs during the week. On the other hand, Texas has the overwhelming majority of the rigs with 779 active drilling rigs in the state. An increase of 134 rigs year over year, drilling activity has increased across the state in the Permian Basin, Eagle Ford Shale, Barnett Shale and Haynesville Shale. 

Home to the vast Marcellus Shale natural gas formation, Pennsylvania had a moderate loss this week, dropping five rigs to 102 active units, which is 26 more rigs than this time last year. 

Louisiana continues to host the second-most number of rigs with 171. Activity offshore Louisiana, as well as drilling in the Haynesville Shale supports exploration and development drilling in the state. 

Not far behind, Oklahoma hosts 170 active drilling rigs in the state, an increase of 10 during the week. While Oklahoma has historically been a major oil and gas producer, drilling in the state has increased by 51 rigs this year, supported largely by ramped up activity in the oil-rich Woodford Shale play. 

Another state that is reaping the benefits of shale development, North Dakota currently has 160 active rigs in the state, most of which are drilling and developing the Barnett Shale oil play. With 65 more rigs than this time last year, increased oil development in North Dakota is expected to catapult the state into the No. 1 position for domestic oil production – in front of Alaska – within a couple of years. 

Continuing a trend over the last few weeks, Canada continues to drastically drop drilling rigs. This week, the country lost 24 rigs, with only 167 rigs actively drilling in Canada. Nonetheless, this is an increase of some 45 units year over year, likely supported by increased activity in the oil sands and unconventional plays in the country.

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