US weekly rig loss slows
US drilling activity dipped by just 1 rotary rig to 899 working this week, down from 1,877 active in the same period last year, said Baker Hughes Inc.
By OGJ editors
HOUSTON, May 29 -- US drilling activity dipped by just 1 rotary rig to 899 working this week, down from 1,877 active in the same period last year, said Baker Hughes Inc.
Inland waters shouldered the loss, down 2 rigs to just 4 drilling. Offshore activity increased by 1 unit to 54 in the Gulf of Mexico and a total of 55 in all offshore US waters. Land operations were unchanged with 840 rotary rigs working.
That may trigger hopes that the falling rig count is nearing bottom. However, many analysts are expecting a bigger decline. A further drop in the US rig count should lift natural gas prices "as it would be evidence we will see a supply response sooner rather than later" as drilling programs are cut back and production begins to fall, said analysts at Pritchard Capital Partners LLC, New Orleans.
Adam Sieminski, chief energy economist, Deutsche Bank, Washington, DC, noted the falling rig count slowed "in April and May compared with the precipitous decline in the December-March period." He said, "So far, however, analysts' expectations for a drop in production have been dashed." Production models by Wood Mackenzie Ltd., a former Deutsche Bank subsidiary, "suggest that total annual Barnett production volumes will continue to grow through 2013 and that LNG can fill whatever production gap might appear later this year or into 2010," Sieminski said.
The number of rigs drilling for gas decreased by 8 to 703 in the latest Baker Hughes count. Those drilling for oil increased by 7 to 187. There were 9 rigs unclassified. Horizontal and directional drilling increased by 1 rig each to 376 and 164, respectively.
Wyoming had the largest loss this week among major producing states, down 3 rigs to 32 making hole. Texas, Arkansas, and California each dropped 1 rig for respective counts of 330, 43, and 20. Unchanged were Oklahoma at 76 and Colorado at 45. New Mexico and Alaska increased by 1 rig each to 36 and 6. Louisiana and North Dakota gained 2 rigs each to 143 and 36, respectively.
In other states of interest, Pennsylvania increased by 3 to 33 rigs working. West Virginia dropped 1 to 22, while Utah was down 2 to 13.
Canada's rig count increased by 16 to 90, still well below the 176 rotary rigs that were working in the same period a year ago.