Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

Baker Hughes (ticker: BHI) released its weekly rig count tally on Thursday, July 2 – one day earlier than normal in consideration of the July 4th Independence Day holiday. The United States added three rigs to its fleet in the latest report and now has 862 total. A total of 12 oil-focused rigs joined the fleet, breaking a 29-week decline that extended back to December.

The largest gainers by play were the Eagle Ford and Williston, who each increased their count by three. All remaining plays were very stable, either maintaining the count or adding/subtracting a single rig. The largest gainers by state were North Dakota and Texas with two apiece, while Louisiana was the biggest loser, dropping two. Texas currently accounts for 42% of all rigs in the United States.

Canada, meanwhile, increased its number by four and has added to its operations in five of the last six weeks. Its 139 running rigs are the most since the week of March 27.

The freefalling numbers, on a North American level, had slowed significantly in the last few months, leaving oil traders, analysts and industry professionals wondering if the trough was near. “The bottom is passing and the upturn is arriving,” said analysts at Evercore ISI, a banking advisory firm, who believe about 100 rigs will be added to the United States rig count between now and year-end. If that estimation proves to be correct, the counts will still be about half the amount from year-end 2014.

Oil & Gas 360® asked Lynn Helms, director of North Dakota’s Department of Mineral Resources, about drilling activity in his state.

OAG360: Oil prices have stabilized in recent months and the drop in rig counts has slowed. Do you think we’ve done the trough as far as the rig count is concerned?

HELMS: Yeah that’s our sense, and feedback from operators is that we’re either at the bottom or very, very near it. We’ve seen a few more rigs idled than we expected, say a month ago, and operators are still experimenting  a little bit with reducing rig counts by very small numbers to see if drilling efficiency for the remaining rigs will make up for it. But it’s very small numbers – ones and twos, out of 35 operators.

bakken-rigs

The full interview with Helms may be read here.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.