BHI: US rig count hits lowest level since January 2003
The overall US drilling rig count declined 16 units to 848 during the week ended Sept. 11, representing a new low point during the current downcycle, according to data from Baker Hughes Inc.
With 1,083 fewer units operating year-over-year, the current overall count is the lowest since the week ended Jan. 17, 2003, and remains below the bottom of 876 during the 2009 downturn.
The overall drop was again anchored by oil-directed rigs, which fell by double-digits for a second consecutive week (OGJ Online, Sept. 4, 2015).
The third straight week of overall declinesfollows across-the-board gains in monthly average rig counts during August, reflecting the small rebound that occurred between June 17 and Aug. 21 when the count gained 28 units.
BHI data from last month indicate the average US count was 883, up 17 from July while still down 1,021 from August 2014.
Mirroring recent downward revisions in crude oil price and US rig count projections, the US Energy Information Administration this week further reduced its forecasts for US crude oil production. In its Short-Term Energy Outlook (STEO) for September, the federal agency projects output to rise to 9.2 million b/d in 2015 from 8.7 million b/d in 2014, but then decrease to 8.8 million b/d in 2016 (OGJ Online, Sept. 9, 2015).
The forecast is 100,000 b/d lower during both 2015 and 2016 compared with the August STEO, mostly reflecting last week’s downward revisions to US production estimates for this year’s first half (OGJ Online, Sept. 1, 2015).
Land-based, oil-directed rigs take another hit
After losing 23 units during the past 2 weeks, the oil-directed rig count now totals 652, down 940 year-over-year but still above the recent nadir of 628 on June 26. During the 2009 downturn, the count was 179 at its lowest point.
A 14-unit loss in land-based rigs to 813 represented their third straight week of losses. They’re now down 1,039 year-over-year. Rigs engaged in horizontal drilling dropped 11 units to 648, their lowest level since Jan. 29, 2010. They’re now down 694 year-over-year. Directional drilling rigs dropped 4 units to 81.
Offshore rigs fell 2 units to 31. Rigs drilling in inland waters were unchanged at 4.
Canada’s overall rig count declined for a fourth consecutive week, albeit by a small margin. Relinquishing 2 units, it now totals 185, down 220 year-over-year. The count’s recent low point was 72 on May 22.
As with the US, Canada’s overall count has been pushed down by an increasing number of oil-directed rigs going offline. The oil-directed count fell 8 units this week to 70, overtaking a 6-unit rise in gas-directed rigs to 196.
Forty-two oil-directed rigs in Canada have been laid down since the peak of a recent rebound on July 31. However, the count remains well above the recent bottom of 15 most recently touched on May 8.
The average Canadian rig count for August was 206, up 23 from July but down 193 from August 2014.
EIA expects production growth in Canada to average 300,000 b/d in both 2015 and 2016, driven by continued expansion in oil sands projects. “Although some previously announced oil sands projects have been put on hold, the vast majority continue as planned, including Imperial Oil and Cenovus oil sands projects scheduled to come online by the end of 2016,” the agency said.
The worldwide rig count for August was 2,226, up 59 from July but down 1,416 August 2014. While most of the monthly gains occurred in the North America, Asia-Pacific and Latin America led the rest of the world with respective additions of 8 and 6 units.
Texas, Permian, Eagle Ford lead losses
Texas again led the major oil- and gas-producing states in losses, losing 9 units to 366, down 539 year-over-year. With 20 units laid down over the past 2 weeks, Texas is approaching its recent low of 361 on June 26. The bottom of the 2009 downturn was 320.
Those losses reflect 3-unit losses in each of the Permian and Eagle Ford, which now total 250 and 90, respectively. The Eagle Ford has declined in 4 straight weeks. The Barnett edged down a unit to 6.
Louisiana and Colorado each edged down 2 units to respective totals of 73 and 32. The DJ-Niobrara edged down a unit to 29. North Dakota, Wyoming, and Kansas each edged down a unit to 70, 24, and 10, respectively. The Williston and Mississippian also each edged down a unit, settling at respective totals of 71 and 19.
Major Bakken producer Continental Resources Inc. this week reported plans to reduce its operated rig count in the play to 8 from 10 by the end of the month.
Unchanged from a week ago were Oklahoma at 106, New Mexico at 48, Pennsylvania at 35, Ohio at 18, West Virginia at 17, California at 14, and Arkansas and Utah each with 4.
With 1 onshore rig coming online, Alaska, the only state to report a gain this week, now has a total of 13 units.
Contact Matt Zborowski at firstname.lastname@example.org.