US drilling improves slightly

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.

Contact Sam Fletcher at samf@ogjonline.com.