Overall Rig Count Up Four

By Richard Rostad, analyst, Oil & Gas 360

Drilling activity expanded in the U.S. this week, partially making up for the decline seen last week, according to Baker Hughes.

A net four rigs began drilling in the country, a change from the 14 that shut down last week. There are now 1,049 rigs active in the U.S., down 34 from the peak seen in the last week of 2018 but still up 74 from this week last year. All four new rigs are land-based, and inland waters and offshore activity held flat.

Oil activity increased significantly this week, with seven such rigs coming online, while three gas rigs shut down. This shift partially reverses the one seen last week, when fifteen oil rigs shut down and one gas rig started operations.

Activity shifted in favor of vertical activity this week, the opposite of the long-term trend. A net five vertical rigs began drilling, while one directional came online and two vertical rigs shut down. Vertical activity now accounts for 6.5% of all U.S. drilling, up from 5.1% in mid 2018 but far below pre-downturn levels of 20% or higher.

A resurgence in vertical activity implies additional conventional drilling, a shift confirmed by state-level rig counts. Four rigs started drilling in Alaska and California, major increases in rig count for each. One rig also came online in Wyoming and Mississippi, while one shut down in New Mexico. The decline in activity in the most popular states continued, as two rigs came offline in Oklahoma and three stopped drilling in Texas. Rig counts in Texas have been in steady decline since the first week of 2019.

Activity in minor basins not tracked by Baker increased by six rigs this week, giving these plays the largest increase in activity this week. Two rigs also came online in the Ardmore Woodford and one started drilling in the Eagle Ford. Two rigs shut down in the Cana Woodford, while the Permian rig count declined by three.


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