Rig counts continue to climb while oil prices retreat
After yesterday’s bottom fell out for oil and prices hover near the $45 per barrel mark, the U.S. rig count continues to increase. The total number of rigs actively drilling this week increased by nine to 440, according to information released from Baker Hughes Industries (ticker: BHI). Despite increases over the past weeks, the total rig count is still down 423 rigs from this time last year.
The number of rigs targeting oil rose by 10 in the week ended July 8, 2016, to 351 as operators put rigs back to work. Oil prices recovered from their lows earlier this year, prompting operators to increase activity. Even though U.S. production is down, the rising rig count has some analysts worried that production may increase soon, capping recent gains in oil price.
The number of rigs drilling for gas decreased by one this week to 88 active rigs. Based on the information in BHI’s report today, that rig was drilling in Kansas. There is currently only one rig active in Kansas now, making it the second-least active state for drilling after Arkansas, which has zero drilling activity at the moment.
Permian is most active
On a play-by-play basis, the Permian continues to show the most activity with 158 total rigs, four more than last week. The Cana Woodford and Williston both reported two additional rigs, while the Barnett, DJ and Mississippian each reported one additional rig this week.
According to its latest well completion report, the American Petroleum Institute estimates that U.S. oil well completions decreased by 69% in the second quarter of 2016 compared to year-ago levels, according to statistics in the organization’s 2016 Quarterly Well Completion Report, Second Quarter. Estimated exploratory gas well completions in the second quarter of 2016 decreased 84% compared to year-ago levels. So far this year, development well footage has decreased 53% and exploratory well footage has decreased by 64%, the API said.
The international rig count for June was also released today, showing the total number of active rigs throughout the world was down by 28, with oil rigs accounting for 27 of those removed from the fleet. The international rig count is down 7% quarter-over-quarter, and 15% from this time last year. The bulk of the lost rig count came from Latin America, which reported ten fewer rigs in June, and Asia-Pacific, which reported eight fewer than in May.
