BHI: US rig count rises by 12

Last week’s slight decline in the US rig count may have been more of a fluke than a sign of an impending plateau in drilling.

Last week’s slight decline in the US rig count may have been more of a fluke than a sign of an impending plateau in drilling.

Baker Hughes Inc.’s tally of active rigs was back up double-digits during the week ended July 7, rising 12 units to 952, up 548 units since the bottom of the drilling downturn on May 20-27, 2016, and its highest point since Apr. 17, 2015.

Last week’s single-unit drop ended 23 consecutive weeks of increases (OGJ Online, June 30, 2017). The count has fallen just six times since the drilling rebound began.

US oil-directed rigs, down 2 last week, gained 7 units this week to 763, up 447 units since May 27, 2016, and their highest point since Apr. 2, 2015. Gas-directed rigs rose 5 units to 189, up 108 units since Aug. 26, 2016, as part of their own resurgence.

All 12 units were onshore, bringing that tally to 927. Rigs engaged in horizontal drilling climbed 12 units to 804, up 490 units since May 20-27, 2016. Directional drilling rigs rose 3 units to 74.

According to preliminary weekly estimates from the US Energy Information Administration, US crude oil production during the week ended June 30 jumped 88,000 b/d to 9.338 million b/d, nearly making up the losses from the previous week’s dive caused by preparations for Tropical Storm Cindy and maintenance in Alaska. Lower 48 output spiked 105,000 b/d while Alaska fell 17,000 b/d.

However, EIA late last week reported that US production posted its first monthly decline of the year in April, shedding 24,000 b/d to 9.083 million b/d, a departure from its early weekly estimates for the month that showed higher output. Gulf of Mexico production dived 101,000 b/d primarily due to maintenance work, more than offsetting increases in major producing states Texas, New Mexico, Colorado, and North Dakota.

In news this week impacting US operators, US Interior Sec. Ryan Zinke signed an order aimed at reducing drilling permit delays on federal onshore lands and holding lease sales at least quarterly (OGJ Online, July 6, 2017). The average time to process a drilling permit application in Fiscal 2016 was 257 days.

Oklahoma, Woodford still hot

Oklahoma and its Woodford shale again bolstered the major oil- and gas-producing states and regions this week. The Sooner State gained 4 units to 136, up 82 units since its recent low on June 24, 2016, and its highest point since Mar. 20, 2015.

The Cana Woodford also climbed 4 units and now totals 63, up 39 since June 24, 2016. The Arkoma Woodford rose 1 unit to 10. The Mississippian dropped 1 unit to 6.

Alaska’s count doubled to 8. Texas, quiet as of late, gained 2 units to 463, up 290 units since May 20-27, 2016. Louisiana also rose 2 units and now counts 69. The Haynesville, which stretches from North Louisiana into East Texas, climbed 2 units to 43, up 30 units since Sept. 30, 2016.

The Granite Wash, which stretches from western Oklahoma into the Texas Panhandle, increased 2 units to 14.

New Mexico and Utah each lost 1 unit to 59 and 7, respectively.

The Permian basin of West Texas and southeastern New Mexico recorded its first decline in 16 weeks, edging down 1 unit to 369.

Canada’s 7-week streak of gains ended this week with a 14-unit decrease to 175, still up 95 units since May 12. The drop was split evenly between oil- and gas-directed rigs, which respectively total 105 and 70.

Contact Matt Zborowski at matthewz@ogjonline.com.

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