US drilling declines to previous low level

The number of rotary rigs working in the US and its waters dropped by 4 this week—the exact number of last week's increase—with 826 units still working.

Nov 22nd, 2002

By OGJ editors

HOUSTON, Nov. 22 -- The number of rotary rigs working in the US and its waters dropped by 4 this week—the exact number of last week's increase—with 826 units still working, down from 986 during the same period last year, officials at Baker Hughes Inc. reported Friday.

Inland-water operations suffered the biggest loss, down 2 units with 18 still working this week. Active land rigs dropped 1 to 703. The number of offshore rigs at work was down 2 to 102 in the Gulf of Mexico, but the addition of a unit off California cut the net loss to 1, with 105 marine units drilling in the US as a whole.

Canada's rig count jumped by 16 to 287, however, up from 254 active rigs during the same period a year ago.

Of the rigs still working in the US, the number drilling for oil declined by 5 to 142 this week, while those drilling for natural gas increased by 1 to 679. Five rigs remained unclassified, an unusually high number for that category.

Although the number of US rigs drilling for gas may fluctuate from week to week, the trend has been down for several months despite a recent run-up in natural gas prices. "The (overall) drop in the rig count confirms our assessment that (exploration and production) companies have depleted their inventory of 'economic' projects for the moment, or until they are willing to raise their sights on what they believe are longer-term 'normalized' natural gas prices," said Robert Morris with Salomon Smith Barney Inc., New York, in a report issued Thursday.

Meanwhile, directional drilling activity in the US decreased by 2 rigs to 215 this week. Horizontal drilling was down 2 units to 59.

Louisiana led this week's decline, down 11 rigs with 153 still working, including 85 offshore. California's total rig count was down 3 to 22. On the other hand, Oklahoma's rig count jumped by 12 to 105. Texas was up 2 rigs with 335 making hole, including 16 in offshore waters. Rig counts in Wyoming and Alaska increased by 1 unit each to 36 and 8, respectively. New Mexico was unchanged, with 54 rotary rigs working.

The number of mobile offshore rigs available for work in the US sector of the Gulf of Mexico reduced by 1 to 186 this week. That boosted the utilization rate to 70.4% in those waters with 131 units still under contract, said officials at ODS-Petrodata, Houston.

The number of contracted offshore rigs in European waters declined by 1 to 84 this week, dipping the utilization rate to 82.4% with 102 units available for work.

Worldwide, the number of mobile offshore rigs under contract increased by 1 to 542 while the total fleet reduced by 1 unit to 656, putting global utilization of those rigs at 82.6%.

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