US drilling improves slightly

After falling for weeks, the US rig count inched up by 4 units to 1,043 rotary rigs working, said Baker Hughes Inc.

Sam Fletcher
OGJ Senior Writer

HOUSTON, Apr. 3 -- After falling for weeks, the US rig count inched up by 4 units to 1,043 rotary rigs working, said Baker Hughes Inc.

Most of the gain was in offshore drilling, up by 3 rigs to 43 rigs drilling in the Gulf of Mexico and 44 units total in US offshore waters. Land drilling increased by 1 rig to 992, while inland-waters activity was unchanged with 7 rigs still working. A year ago at this time there were 1,830 rotary rigs drilling in the US.

In the latest count, the number of rigs drilling for oil increased by 7 to 224. Those drilling for natural gas declined by 2 to 808. There were 11 rigs unclassified. Directional drilling was down 3 units to 212 still working. Horizontal drilling decreased by 7 units to 409.

In New Orleans, analysts at Pritchard Capital Partners LLC earlier reported 6 midwater rigs are stacked as that market continues to soften. Included is Atwood Oceanics Inc.'s second generation semisubmersible Atwood Southern Cross, idle since mid-December and hot stacked at an operating cost of $67,000/day. Capable of operating in 2,000 ft of water with a rated drilling depth of 20,000 ft, the rig has been offered for work in all markets. Pritchard Capital earlier expected the rig to find work by mid-July at $220,000/day. However, analysts now say, "We do not believe the rig will go back to work until fiscal year 2010."

Meanwhile, following weather delays the newbuild 350-ft jack up Atwood Aurora is continuing commissioning off Egypt and is expected to begin working under a contract with RWE Dea Nile in April. It's contracted through March 2012 at $165,000/day.

"Atwood has two jack ups whose contracts expire in mid-2009; the rigs could see some downtime in between contracts," said analysts in the Houston office of Raymond James & Associates Inc.

After weeks of leading the major producing states in the number of rig losses, Texas' rig count increased this week by 3 to 416. Louisiana and Alaska also were up 3 rigs each to 131 and 12, respectively. Colorado, Arkansas, and North Dakota were unchanged with respective counts of 55, 47, and 46. California's count dipped by 1 rotary rig to 21 working. New Mexico was down 3 rigs to 35. Oklahoma and Wyoming lost 4 rigs each to 106 and 37. In other areas of interest, Pennsylvania increased by 3 rigs to 30. West Virginia was up 2 to 24, and Utah was unchanged at 18.

Canada's weekly rig count dropped by 29 to 75 rigs working, down from 126 during the same period last year.

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