BHI: Permian, overall US rig counts each up 7

The rig counts for the US and its largest drilling and production region each gained 7 units during the week ended May 5, according to data from Baker Hughes Inc.

The rig counts for the US and its largest drilling and production region each gained 7 units during the week ended May 5, according to data from Baker Hughes Inc.

At 877 rigs working, the overall US count is up 473 units since its nadir in recent BHI data touched during May 20-27, 2016. Bolstered by another Permian increase, the count has now risen in 16 straight weeks since Jan. 13, during which time it has added 218 units (OGJ Online, Apr. 28, 2017).

US oil-directed rigs also rose for a 16th consecutive week, gaining 6 units to 703, up 387 units since May 27, and their highest point since Apr. 24, 2015. Gas-directed rigs tallied 2 units to 173, up 92 units since Aug. 26. The count of rigs considered unclassified halved to 1 this week.

US crude oil production during the week ended Apr. 28 came just short of the 9.3 million-b/d mark, tallying a 25,000-b/d rise from the Lower 48 and 3,000-b/d rise from Alaska, according to US Energy Information Administration data.

Onshore rigs increased 4 units to 853, with horizontal rigs and directional drilling also up 4 units each to respective totals of 734 and 67. Horizontal rigs have gained 420 units since last May 20-27.

One rig started work this week off each of Louisiana and Alaska, bringing the overall US offshore count to 19. The tally of rigs drilling in inland waters rose 1 unit to 5.

Texas posted a 6-unit increase this week to 443, up 269 units since last May 20-27. The Permian gained 7 units to 349, up 215 units since last May 13. Helped by its gains offshore and in inland waters, Louisiana jumped 4 units to 62. The Haynesville edged up a unit to 39, up 26 units since Sept. 30.

Wyoming and Alaska each rose 2 units to 22 and 8, respectively. New Mexico and Colorado each edged up a unit to 56 and 30, respectively. New Mexico is now up 43 units since Mar. 18, 2016.

North Dakota, Pennsylvania, West Virginia each dropped a unit to 43, 33, and 11, respectively. The Marcellus lost 3 units to 43, still up 22 units since Aug. 12. The Williston decreased 1 unit to 43, still up 21 units since May 27-June 3.

After hitting its highest point in 2 years last week, recently hot Oklahoma dived 7 units this week to 120, still up 66 since June 24. The Cana Woodford fell 4 units to 51, still up 27 since June 24. The Arkoma Woodford and Ardmore Woodford each declined 1 unit to 9 and 1, respectively. The Mississippian also decreased a unit and now totals 7.

Indies boost Permian drilling

This year’s first 3 months were characterized by a spike in onshore drilling activity facilitated by newly expanded capital budgets. A large portion of the rig deployments came from the biggest US independents, which also happen to be major Permian operators.

In their earnings releases this week, Anadarko Petroleum Corp., Apache Corp., Concho Resources Inc., and ConocoPhillips each reported noticeable first-quarter company rig-count increases, with Anadarko and Concho already exceeding their planned averages for the year by early second quarter. Activity in the Delaware basin in particular continued to heat up.

Anadarko added 6 rigs during the first quarter and now is operating 21, already above the 15-20 average for full-year 2017 that the firm planned last March in its guidance.

The firm added 5 rigs in the Delaware basin during the quarter and 1 more after the end of the quarter, bringing its count in the basin to 15, up from its initial guidance of 10-14 for 2017. In the DJ basin, the firm added 1 rig and now totals 6, all drilling multiwell development pads.

Apache during the first quarter increased its Permian rig count to 13 and drilled and completed 22 gross-operated wells, up from 7 rigs and 17 gross-operated wells during fourth-quarter 2016.

At Alpine High in the Delaware basin, the firm averaged 4 rigs and announced 3 new test well results, 2 of which were shallow source rock tests and the other a successful azimuth test in the Woodford formation at the King Hidalgo pad in the southern portion of the play. Apache also continued pad drilling in Pecos Bend with an average of 2 rigs.

In the Midland basin, Apache averaged 6 rigs during the quarter and drilled and completed 9 gross-operated wells. Activity targeted the Wolfcamp and Spraberry shale formations in the Wildfire, Azalea, and Powell fields.

Concho Resources during the first quarter averaged 21 rigs, higher than the 19 planned in its full-year outlook released in February. The firm currently has 8 horizontal rigs in the northern Delaware basin, 6 horizontal rigs in the southern Delaware, 5 horizontal rigs in the Midland basin, and 2 horizontal rigs on the New Mexico shelf.

ConocoPhillips said it added rigs in the Eagle Ford and Permian to bring its Lower 48 tally to 12.

Another major US independent seeking to establish a Permian presence, Marathon Oil Corp. in March agreed to two northern Delaware basin purchases, of which the first closed May 1 and second is expected to close in the second quarter (OGJ Online, Mar. 21, 2017). The firm now has 1 rig working on its new acreage and is ramping up to 3 rigs there by midyear.

Marathon’s companywide rig count spiked to 20 from 12 during the first quarter. In addition to the Permian rig it added, the firm ended the quarter with 7 rigs working in its Oklahoma Resource basin acreage and plans to ramp up to 10 during the year; had 6 rigs working in the Eagle Ford and plans to keep that count throughout the year; and plans to drop from the 7 rigs it had working in the Bakken at quarter’s end to an average of 6 for the year.

Contact Matt Zborowski at matthewz@ogjonline.com.

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