883 rigs sitting idle in the United States

Although the U.S. rig count rose in the week ended September 16, 2016, it remains 511 below where it sat at this time last year, according to information from Baker Hughes Industries. As the active number of rigs remains well below the levels seen two years ago, 883 rigs sit idled, according to information from Wolfe Research.

In Texas, Louisiana, Oklahoma, and New Mexico, Wolfe estimates there are 327 super & hi-spec rigs currently idled, along with 250 medium-spec rigs that could satisfy any demand for new rigs in the area for the next couple of years, the group said. In that area of the country, 63% of all idled rigs are concentrated in the hands for four companies – Helmerich & Payne (ticker: HP), Nabors Industries (ticker: NBR), Patterson-UTI Energy (ticker: PTEN), and Precision Drilling Corporation (ticker: PDS).

“The market may need to absorb [the 287 rigs held by other companies] before any material dayrate inflection can occur,” said Wolfe Research. “Our forecast does not call for this level of rig additions to occur until 4Q18.”

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