BHI: US oil rig count up 100 since May 27
The Baker Hughes Inc. count of active US oil-directed drilling rigs this week added the 99th and 100th units to come online since the drilling rebound began following the week ended May 27.
Now having gone nearly 3 months without recording a loss, the tally of oil-directed rigs rose 2 units to 416. The modest increase, however, wasn’t enough to prevent the overall US rig count from declining for just the third time in 17 weeks. The overall tally during the week ended Sept. 16 fell 2 units to 506, still up 102 units since May 27 (OGJ Online, Sept. 9, 2016).
The overall count’s recent upward momentum has come on the back of oil-directed rigs and particularly those in the Permian basin, where all 65 of the units to start operations during the rebound have targeted oil and firms continue to advance plans to mobilize drilling activity.
In tandem with its $2-billion agreement this week to acquire Freeport-McMoRan Inc.’s Gulf of Mexico assets, Anadarko Petroleum Corp. reported plans to add 2 more rigs later this year in each of the Permian's Delaware basin and the DJ basin of Colorado and Wyoming, with the intent of further ramping up activity thereafter (OGJ Online, Sept. 13, 2016).
Anadarko had previously said it planned to keep 6 rigs working in the Delaware basin instead of reducing the count to 4 as originally intended. The firm cited improved efficiencies and lower drilling costs as reasons for maintaining the higher count.
Last week, Charger Shale Oil Co. LLC and funds managed by Oaktree Capital Management LP formed a joint venture that plans to deploy 2 rigs in the Delaware basin a month after the JV’s official funding, and Synergy Resources Corp. said it anticipates running a 2-rig program primarily in its Greeley Crescent acreage of the DJ basin during 2017.
During this week, the Permian gained 2 units to 202 while the DJ-Niobrara edged up a unit to 16. Coinciding with the increased Permian drilling activity in recent weeks is a growing number of drilled but uncompleted (DUC) wells, according to new estimates by the US Energy Information Administration.
The Permian’s tally of DUC wells posted a monthly increase of 38 in August to 1,348 (OGJ Online, Sept. 13, 2016). EIA also forecasts the basin’s crude production to rise 22,000 b/d in October from its September total to just fewer than 2 million b/d.
The basin represents more than a quarter of the 5,031 DUC wells counted for August in the major US oil and gas producing regions, and about two thirds of the entire US rig count increase since the drilling rebound began.
Land-based, gas rigs down
US onshore rigs fell 3 units this week to 482, reflecting a 2-unit loss in rigs engaged in horizontal drilling to 394 and a 1-unit loss in rigs drilling in inland waters to 4. Horizontal rigs are still up 80 units since May 27.
Gas-directed rigs contributed to this week’s overall rig count decline by shedding 3 units to 89. One rig considered unclassified stopped work as well, cutting that tally in half.
Louisiana’s onshore count fell 4 units while its offshore count rose 2 units, bringing the state’s overall tally to 41. Texas and North Dakota each fell 1 unit to 244 and 27, respectively. The Barnett lost 2 units to only 1 rig working. The Haynesville dropped a unit to 13. As with its home state, the Williston was down 1 to 27.
Oklahoma led the major oil- and gas-producing states with a 3-unit rise to 65, reflecting in part 1-unit increases in the Cana Woodford to 32 and Arkoma Woodford to 3. Alaska was the only other state to record a gain, adding a unit to reach 5.
With the 2 units starting work offshore Louisiana, the overall US offshore count reached 20.
Impacting future Gulf of Mexico drilling operations, Cobalt International Energy Inc. came to an agreement this week with Rowan Cos. PLC for the early termination of the contract for the Rowan Reliance drillship, which had primarily performed appraisal operations at the North Platte Inboard Lower Tertiary discovery (OGJ Online, Sept. 16, 2016). The contract will now end Mar. 31, 2017, instead of Feb. 1, 2018.
Canada’s rig count also relinquished 3 units, all of which were gas-directed. Those tallies are now respectively 132 and 89. Oil-directed rigs edged up a unit to 75, an increase of 67 units since Apr. 8.
Contact Matt Zborowski at email@example.com.