Total U.S. rig count up 18 from last week

The rig count continued to rise in the United States for the week ended January 27, 2017, according to Baker Hughes Industries (ticker: BHI). The total count now stands at 712, up 93 from this time last year. The majority of the gains were once again from rigs drilling for oil.

Rigs targeting liquids increased by 15 week-over-week to 556, up 68 from a year-ago. Those drilling for natural gas also increased this week by three to a total of 145, up 24 from this same period in 2015, according to BHI’s weekly data.

The largest gains were once again in the Permian Basin, which has quickly become the premier basin for E&P operators in the United States. The region add ten rigs over the course of the week, bringing the total to 291, up 109 (60%) from this time last year. The Permian remains the most active basin in the country by a large margin with the next-most active region having just 54 active rigs.

On a state-by-state basis, Texas added nine rigs, Oklahoma added five, New Mexico added four, Louisiana added two, and Alaska and North Dakota each added one rig over the course of the week. Colorado laid down three rigs while Arkansas and West Virginia each lost one rig from their counts.

The effective rig count in the Permian Basin was 3.4x higher than the reported rig count in December 2016

Looking at the rig count in absolute terms can be misleading if the number is not put into the proper context. Looking at the rig count on a production per-rig basis, EnerCom Analytics has developed the EnerCom Effective Rig Count (EERC) to paint a more accurate picture of what the rising rig count means for the industry. Using numbers from December 2016 (the last month both production and rig numbers were available) compared to January 2014, EnerCom found that the effective rig count in the Permian Basin was 3.4x higher than the number being reported.

EnerCom Effective Rig Count for the Permian Basin from Jan 2014 to Dec 2016

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