Low gas prices continue to undermine US drilling activity

By the OGJ Online Staff

HOUSTON, Feb. 25 -- US drilling activity continued to plunge, dropping 23 rotary rigs last week with 792 still working, down from 1,121 during the same period last year, said officials at Baker Hughes Inc., Houston.

Offshore drilling was down 11 rigs to 112 in the Gulf of Mexico and 119 in US ocean waters as a whole. There were 656 land rigs drilling this week, 9 fewer than last week. Another 17 units were working inland waters, 3 less than last week.

ODS-Petrodata Group in Houston reported a net decline of 5 mobile offshore rigs under contract in the gulf this week, along with 1 addition to the available fleet, leaving 120 contracted rigs out of a fleet of 201. That pushed rig utilization in those waters down almost 3 percentage points to 59.7%, the lowest level for this year and the first time below 60%, officials said.

Weak domestic markets for natural gas are still squeezing demand for offshore rigs in US waters, they said.

Of the total number of US rotary rigs working this week, 647 were drilling for gas -- down 21 from the previous week, said Baker Hughes officials. There also were 144 rigs drilling for oil, 2 less than last week; and one unclassified unit.

Among those working rigs, 224 were involved in directional drilling, down 19 from the previous week. The number doing horizontal drilling was up 1 to 55.

Louisiana led the general decline, down 7 rigs this week with 162 still active. Texas was down 6 to 332. Wyoming fell by 4 to 42, New Mexico was down 2 to 37, and Alaska dipped 1 to 15. Among the major producing states, only Oklahoma was unchanged, with 70 rigs making hole.

Canada had 410 rotary rigs working this week, 18 less than the previous week and down from 553 a year ago.

ODS-Petrodata reported 1 more mobile offshore rig under contract in European waters this week, boosting the utilization rate nearly a full percentage point to 88.3% in those waters with 91 rigs contracted out of the 103 available.

The 5 rigs that came off contacts in gulf waters were directly reflected in worldwide numbers, dropping global utilization nearly a full point to 80.3%, with 526 units under contract out of a total available fleet of 655.

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