Drilling activity continues to diminish

Sam Fletcher
OGJ Senior Writer

HOUSTON, May 15 -- The US rig count continued to contract, down by 10 to 918 rotary rigs working this week, less that half of the 1,862 units that were active in the same week a year ago, said Baker Hughes Inc.

Land operations shouldered the latest loss, down 13 rigs to 855 drilling. Inland-water activity remained unchanged with 7 rigs working. Offshore drilling increased by 3 to 55 rotary rigs working in the Gulf of Mexico out of a total of 56 on federal offshore leases.

Of the rigs still working, 728 are drilling for natural gas, down 2 from the previous week. The number drilling for oil fell by 9 to 181. There were 9 rigs unclassified. Horizontal drilling was down 1 to 379 rigs. Directional drilling totaled 160 rigs, 4 fewer than last week.

Texas continued to lead the decline among major producing states, down 13 rigs with 342 still working. Arkansas lost 4 rigs to 44. North Dakota and New Mexico laid down 3 rigs each, to respective counts of 33 and 31. California was down by 1 to 20. Oklahoma was unchanged at 84.

Wyoming and Alaska increased by 1 rig each to 36 and 6, respectively. Colorado was up 2 to 45 rigs working. Louisiana's rig count jumped by 8 to 146. In other states of interest, Pennsylvania gained 3 to 31. Utah increased by 1 to 15, and West Virginia was unchanged with 23 rotary rigs drilling.

Canada's rig count increased by 5 to 68 this week, down from 132 units working a year ago.

While assessing several oil field service companies this week, James C. West at Barclays Capital Inc. in New York had some general observations about drilling markets. "The natural gas market remains difficult, and we believe a significant recovery in gas-directed activity is unlikely until mid-2010. A modest pick-up in oil-directed activity near term and aggressive cost cutting should partially mitigate this weakness," he said.

Commenting on Basic Energy Services Inc. (BAS) in Midland, Tex., West said, "Although conditions have stabilized somewhat within the well servicing market and pricing appears to be firming, we continue to believe natural gas fundamentals will not support a meaningful recovery in utilization until mid-2010." He said, "While maintenance activity has picked up, utilization is expected to remain low, particularly in the Rockies and Midcontinent. In response, BAS stacked one third of its well-service fleet and is scaling back operations in less active markets."

In his assessment of Parker Drilling Co., Houston, West said, "While utilization has recently improved for Parker's US barge fleet, we believe business conditions for the company's domestic-oriented businesses are likely to remain challenging into 2010, given the likelihood of continued weakness in natural gas activity." He noted, "Around one third of Parker's international fleet will come off contract in 2009; however, bidding activity remains high, and many rigs are likely to find work with some gaps in between contracts. Southeast Asia is the most challenging region, while the Americas is relatively strong."

Looking at offshore marine services, West said, "We believe weakness in the shallow-water Gulf of Mexico and the North Sea will continue to pressure vessel day rates and utilization during 2009." He said, "The shallow-water gulf has become increasingly challenging—average marine vessel utilization fell to 81% from 88% in the fourth quarter, with significant declines in gulf-levered asset classes. We believe this market will remain difficult through 2009. Deepwater utilization and day rates are relatively stable."

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

US Forest Service takes no stance on fracturing in national forest

12/12/2014

The US Forest Service has dropped a proposal that would have banned hydraulic fracturing in the George Washington National Forest.

Weak crude prices could threaten Bakken production growth

12/12/2014 Bakken shale production set another record in August, but weakening crude prices and flaring reduction efforts threatened to temper production grow...

BHI: US rig count forced down by large losses in Texas

12/12/2014 Forced down by large losses in Texas and specifically the Permian basin, the US drilling rig count plummeted 27 units to settle at 1,893 rigs worki...

Husky reports start of steam operations at Sunrise oil sands project

12/12/2014

Husky Energy, Calgary, reported the start of steam operations at the in situ Sunrise Oil Sands Project in northeastern Alberta.

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

Independent assessment hikes Husky heavy oil resources

12/12/2014 Husky Energy Inc., Calgary, says an independent assessment increases its heavy oil resources in the Lloydminster region of Alberta and Saskatchewan.

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Stone drills successful Utica exploration well

12/10/2014 Stone Energy Corp., Lafayette, La., reported that its Pribble 6HU well in Wetzel County, W.Va., flowed from a 3,605-ft lateral at 30 MMcfd during t...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected