US rig count reaches 5-year low

By OGJ editors
HOUSTON, Mar. 13 -- US drilling activity continued to plummet this week, down 44 units with 1,126 rotary rigs still working, said Baker Hughes Inc.

That's the lowest rig count since the week ended Feb. 13, 2004, when 1,114 rigs were drilling. A year ago at this time, there were 1,792 rotary rigs drilling in the US.

In New Orleans, Pritchard Capital Partners LLC analysts said the US rig count is unlikely to bottom until this year's second half and likely will "trough out at 800-1,000 rigs," down from an estimated minimum of 1,000-1,250 rigs. They said, "We would also look for a comeback in oil prices to lead out of the recovery, as a natural gas supply response may not kick in until late 2009 or 2010."

Much of this week's loss was in land operations; down 41 rigs with 1,073 still working. Offshore drilling declined by 4 rigs to 46 in the Gulf of Mexico and a total 47 on offshore federal leases. There were 6 rigs working inland waters, 1 more than the previous week.

Of the rigs now working, 994 are drilling for natural gas, 32 fewer than a week ago. Those drilling for oil were down 13 to 228. There were 14 units unclassified. Horizontal drilling fell by 13 rigs to 432. Directional drilling was down 11 units to 226.

Texas continues as the leader in losses among major producing states, down 24 rotary rigs to 456 still drilling. Oklahoma and North Dakota were down 5 rigs each to 110 and 50, respectively. Louisiana and Wyoming each dropped 3 rigs with respective counts of 137 and 44. Colorado and Arkansas lost 2 rigs each, to 61 and 45 respectively. California was down 1 rig to 23 working, while Alaska was unchanged at 11. New Mexico had the only gain in the bunch, up 1 to 43. In other states of interest, Pennsylvania was down 1 rig to 26. West Virginia increased by 1 rig to 23, while Utah was unchanged at 23.

Canada's rig count fell by 79 to 220 rigs still active. Last year at this time it had 510 rotary rigs working.