BHI: A year after historic low point, US rig count back above 900

The US drilling rebound that extends back almost a year has surpassed another benchmark, rising above 900 in its 18th straight week of gains.

The US drilling rebound that extends back almost a year has surpassed another benchmark, rising above 900 in its 18th straight week of gains.

The Baker Hughes Inc. tally of active rigs jumped 16 units during the week ended May 19 to 901, up 497 since a bottom in recent data during the weeks ended May 20-27, 2016, and its highest level since May 1, 2015 (OGJ Online, May 12, 2017).

Since last May 27, after which the drilling rebound commenced, the count has risen in all but 5 weeks.

Oil-directed rigs have pushed up the count in most weeks during that time. This week, however, the rise was evenly split between oil-directed and gas-directed rigs, each up 8 units to 720 and 180, respectively. One rig considered unclassified remains active. Rigs targeting oil are now up 404 units since May 27, while gas-directed rigs are up 99 units since Aug. 26 in their own rebound.

Land-based rigs gained 14 units to 874, with horizontal rigs jumping 17 units to 759, up 445 since last May 20-27. Four rigs remain drilling in inland waters. Offshore rigs rose by 2 for the third consecutive week and now total 23.

Momentarily bucking the upward trend in upstream activity, US crude oil production declined during the week ended May 12 for the first time in 13 weeks, according to data from the US Energy Information Administration. Overall output was down 9,000 b/d to 9.305 million b/d, with Alaska’s 21,000-b/d drop overshadowing the Lower 48’s 12,000-b/d increase.

EIA expects continued oil production increases in June from the Lower 48’s two most resurgent regions. In the agency’s monthly Drilling Productivity Report released this week, it projects the Permian to rise 71,000 b/d month-over-month to average 2.492 million b/d and Eagle Ford to rise 36,000 b/d to 1.28 million b/d (OGJ Online, May 15, 2017).

The forecast reflects the number of active drilling rigs, drilling productivity, and estimated changes in production from existing oil and gas wells. EIA estimates the April counts of drilling but uncompleted (DUC) wells climbed in the Permian by 126 month-over-month to 1,995 and in the Eagle Ford by 32 to 1,315.

Texas activity hub

As with many weeks over the past year, Texas this week accounted for the largest increase in US drilling activity. Up 8 units to 459, its count has increased 286 units since its recent low point in BHI data during last May 20-27.

The Permian rose 4 units to 361, up 227 since its recent low point on May 13, 2016. The Eagle Ford gained 2 units to 85, up 54 since Oct. 14 in its more-recent rebound. The Haynesville and Barnett gas plays each grabbed 1 unit to 40 and 7, respectively. The Haynesville is up 27 units since Sept. 30. The Granite Wash dropped a unit this week to 10.

Oklahoma tallied 4 units to 122, up 68 since June 24. The Mississippian jumped 3 units to 9.

Three units started work offshore Louisiana, but its overall count rose by 2 to 64 given 1 onshore loss. Pennsylvania and Wyoming each were up 2 and now have 35 and 25, respectively. The Marcellus’s 2-unit gain brought its tally to 45, up 24 since Aug. 12.

New Mexico and Ohio each increased a unit to 56 and 24, respectively. New Mexico is up 43 units since its recent low on Mar. 18, 2016. Reflecting the movement in its home state, the Utica also rose a unit and now totals 25.

Alaska lost its only offshore rig, bringing its overall count to 6. Colorado and the DJ-Niobrara each dropped 2 units to 29 and 23, respectively.

Canada’s seasonal dive ended this week with a 5-unit increase to 85, down 267 since an almost 2-year high on Feb. 10. Oil-directed rigs jumped 7 units to 36, slightly offset by a 2-unit decline in gas-directed rigs to 49.

Contact Matt Zborowski at matthewz@ogjonline.com.

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