US drilling continues to drop

The decline in US drilling accelerated, down by 12 rotary rigs to 887 this week after losing only 1 in the prior week, said Baker Hughes Inc.

HOUSTON, June 5 -- The decline in US drilling accelerated, down by 12 rotary rigs to 887 this week after losing only 1 in the prior week, said Baker Hughes Inc.

That compares with 1,886 rotary rigs drilling during the same period in 2008. Yet despite the rapid decline in drilling activity, the low-cost, high-deliverability shale plays, including the Haynesville, Marcellus, and Fayetteville, are changing the productive intensity of a rig in North America, said analysts at Tristone Capital Inc., Calgary.

“We estimate the annualized production intensity per rig in the US has increased from 9.7 MMcfd at the beginning of 2007 to 12.5 MMcfd today, with a notable step change in output per rig when Haynesville activity accelerated in July 2008. All said, the overall efficiency gains from the dominant shale plays are nearly 30%,” they said.

US land operations incurred the bulk of the latest rig loss, down by 9 to 831 units working. Inland waters remained unchanged with 4 active rigs. Offshore drilling declined by 3 rigs to 51 in the Gulf of Mexico and a total of 52 in US waters.

Of the rigs still working, 700 were drilling for gas, down 3 from the previous week. Those drilling for oil declined by 8 to 179. There were 8 unclassified rigs. Directional drilling increased by 6 to 170. Horizontal drilling was down 4 to 372 units.

Among the major producing states, Louisiana dropped 11 rigs to 132 active. Texas was down 3 to 327. North Dakota lost 2 to 34. New Mexico and Wyoming were down 1 rig each to 35 and 31, respectively. Oklahoma and Alaska were unchanged at 76 and 6. Arkansas was up 2 rigs to 45 working. Colorado and California gained 1 rig each to respective counts of 46 and 21.

In other states of interest, Utah increased by 2 rigs to 15 drilling. West Virginia was unchanged at 22. Pennsylvania was unchanged at 33.

However, Canada had 101 rigs working this week, up by 11, but still down from 218 active rigs in the same period last year.

For May, the international rig count was 993, up 7 from April but down 82 from May 2008, said Baker Hughes. The international offshore rig count for May was 272, just 1 rig fewer than in April and down 33 from May 2008.

The US rig count for averaged 918 in May, down 77 from April and down 945 from May 2008. Canada’s May rig count averaged 72, down 2 from April and down 63 from May 2008.

The global rig count for May averaged 1,983, 72 fewer than in April and down 1,090 from May 2008.

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