BHI: Down 13 units, US oil rig count falls for first time in 7 weeks
The overall US drilling rig count’s 13-unit drop during the week ended Sept. 4 entirely consisted of oil-directed, land-based units, according to data from Baker Hughes Inc.
The decline represents the end of 6 straight weeks of gains for oil-directed rigs and the second straight week of losses for the overall count, which is now down 1,061 year-over-year.
Last week, well permits issued totaled 732, down slightly from the 736 issued the previous week, according to an energy update from Raymond James & Associates Inc. Before the 158-permit decline 2 weeks ago the 6-week average was 870.
“This makes sense, as [West Texas Intermediate] prices had been hovering around $40[/bbl] for roughly 2 weeks, likely causing operators to reassess any plans to ramp up activity.” RJA said. “This recent permit data would suggest that there should be further modest US rig activity declines in the coming months.”
RJA last week revised downward its rig count projections for the coming years, most notably saying it anticipates an “ugly” next 12 months (OGJ Online, Aug. 28, 2015).
Meanwhile, separate downward revisions relating to US oil production came this week from the US Energy Information Administration, which cut estimates for the first 5 months of the year, and indicated that output averaged 9.4 million b/d through June (OGJ Online, Sept. 1, 2015).
Onshore, oil-directed units go offline
After losing 13 units this week, US oil-directed rigs now total 662, down 922 year-over-year. Until this week, the count had risen 47 units since the week ended June 26. Gas-directed rigs, which accounted for last week’s losses, were unchanged at 202.
Land-based rigs lost 16 units 827, down 1,020 year-over-year. Rigs engaged in horizontal drilling also fell 13 units, settling at a total of 659, down 674-year-over-year. Directional drilling rigs, meanwhile, gained 5 units to 85.
Offshore rigs also increased this week, with 3 units coming online to reach 33. Rigs drilling in inland waters were unchanged at 4. EIA indicated this week that production from federal waters in the Gulf of Mexico during June reached 1.45 million b/d, up slightly from 1.44 million b/d in May and more noticeably up from 1.41 million b/d in June 2014.
Canada’s rig count fell for a third consecutive week, losing 9 units overall to settle at 187, down 227 year-over-year. As with the US and the previous weeks, Canada’s decline comprised oil-directed rigs, which dropped 10 units to 78, down 150 year-over-year. Gas-directed rigs edged up a unit to 109.
Noticeable drop in Eagle Ford, Texas
Texas led the major oil- and gas-producing states with an 11-unit drop to 375, down 532 year-over-year. Four of those units went offline in the Eagle Ford, which now totals 93—its lowest since BHI began tracking rig count activity by major basins in February 2011.
The Permian and Granite Wash each relinquished 2 units, settling at respective totals of 253 and 15.
The EIA reported that oil output in Texas during June averaged 3.46 million b/d, down from 3.53 million b/d in May but still up from 3.15 million b/d in June 2014. The state peaked at 3.64 million b/d in March.
New Mexico, Colorado, and Kansas each lost 2 units to 48, 34, and 11, respectively. North Dakota, Ohio, and Alaska each edged down 1 unit to respective totals of 71, 18, and 12. North Dakota output averaged 1.2 million b/d, up slightly from 1.19 million b/d in May and more noticeably from 1.09 million b/d in June 2014. Its recent peak was 1.23 million b/d in December 2014.
Unchanged from a week ago were Pennsylvania at 35, Wyoming at 25, West Virginia at 17, and Arkansas and Utah each with 4.
Oklahoma and California each gained a unit to 106 and 14, respectively. Last week’s losses leader Louisiana led the states in gains this week, adding 4 units to reach a total of 75.
Contact Matt Zborowski at [email protected].