The Marcellus sees the majority of the increased drilling activity last week
The number of rigs actively drilling in the United States continued to climb ahead of Thanksgiving, according to Baker Hughes Industries (ticker: BHI). The company, which releases a weekly update on drilling in North America every Friday, put out information on the number of active rigs last Wednesday because of the U.S. Thanksgiving holiday. The rig count showed a total of 593 rigs drilling, five more than in its previous report.
Oil or gas?
The Permian has been the dominant play for drilling activity in 2016 with 228 rigs active as of November 23, but the majority of new rigs last week were in the Marcellus. The play reported four more rigs, bringing the total in the Marcellus to 38, four shy of the number of rigs drilling in the area at this time last year. The onset of colder weather has supported natural gas prices, with gas prices pushing above $3 per MMBtu on November 23, and continuing to climb since.
Oil continues to be the hot commodity, however, with three net rigs added to the fleet, while only two net rigs were added to those targeting natural gas. The total number of rigs drilling for oil now stands at 474, while those looking for natural gas number 118 – 81 and 71 fewer than last year, respectively.
A note from Capital One Southcoast Monday pegged a normalized oil rig count around 430 at $40 oil, and around 530 at $50 oil.
The DJ reported two additional rigs last week, while the Mississippian added one. The Cana Woodford lost two rigs and the Permian and Williston each reported one fewer than in the previous week. Despite the lower rig count in each this week, the Cana Woodford and the Permian remain the only basins in the U.S. with more activity now than at the same time last year.
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