US drilling activity declines, rolls back recent gains

The number of rotary rigs drilling in the US and its waters fell by 14 to 848 this week, wiping out most of the 24-unit gain from the previous 2 weeks, officials at Baker Hughes Inc. reported Friday.

By OGJ editors

HOUSTON, July 12 -- The number of rotary rigs drilling in the US and its waters fell by 14 to 848 this week, wiping out most of the 24-unit gain from the previous 2 weeks, officials at Houston-based Baker Hughes Inc. reported Friday.

The current count is well below the 1,293 rigs that were working during the same period a year ago, which marked both the peak of 2001 drilling activity and the highest US rig count since early 1986.

All of the decline was in land operations, down to 720 active rigs this week, Baker Hughes officials said. Offshore activity was unchanged, with 103 rigs drilling in the Gulf of Mexico and 108 in US waters as a whole. Drilling in inland waters also remained unchanged, with 20 rigs still active.

Canada's rig count continued to increase, up 7 to 270 this week. But it still lags behind last year's count of 338 for the same period. That's largely because "spring overstayed its welcome in Canada," said James Stone, managing director of oil field services research at UBS Warburg LLC. The spring thaw typically slows field operations in Canada, following the winter drilling season that ends in March. But this year, spring activity "proved to be slower than we had expected," Stone reported Thursday. "We thought that the month of June, as is typically the case, would see a rapid rise in the rig count to historical utilization rates and thus save the quarter. We were wrong. The rig count in Canada did increase, but not at the pace we had expected."

Among US rigs, the number drilling for oil this week decreased by 9 to 135. The number drilling for natural gas was down 5 to 711. Two rigs were unclassified.

Rigs involved in directional drilling declined by 4 to 248. Horizontal drilling was down 7 rigs to 57.

Texas led this week's decline, down 10 rigs to 325 still active. New Mexico's rig count declined by 5 to 43. Oklahoma was down 2 rigs to 100, while Louisiana was down 1 rig to 162.

Wyoming's rig count increased by 3 to 46, and California was up 1 to 24. Alaska was unchanged, with 12 rigs working.

ODS-Petrodata Group, Houston, said Friday the utilization rate among mobile offshore rigs in the Gulf of Mexico plateaued at 68% this week, following increases during the 3 previous weeks. Gulf rig numbers were unchanged with 134 contracted out of a fleet of 197.

In European waters, the utilization rate eroded for the fifth consecutive week, with one less rig now under contract. Utilization was down a point to 81.7%, with 85 rigs contracted out of 104 available in that market.

The total number of mobile offshore rigs under contract worldwide also declined by 1 unit to 531 out of a total fleet of 656. Global utilization among offshore rigs slipped to 80.9%.

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