Operations reaching equilibrium near 1,050 rigs

Drilling activity fell in the U.S. this week, as rig counts continue to meander near 1,050 total rigs, according to Baker Hughes Weekly Rig Count.

A net four rigs shut down this week, leaving 1,044 active in the country. Five land-based rigs stopped drilling, while one offshore rig became active. There has been little change in overall rig counts since early May, and drilling activity appears to be roughly stable. The current rig count has only increased by 90 since this point last year. For reference, since 2000 rig count year-over-year change has averaged roughly 320.

Gas drilling decreased by a disporportionate level this week, as three such rigs shut down. Two oil rigs also came offline, while one miscellaneous rig began drilling. There are now 859 oil-targeting rigs in the country, compared to 183 gas and two miscellaneous rigs. While oil rigs decreased, the proprotion of rigs drilling for oil incresaed this week, reaching 82.3%. This is the fourth-highest percentage since the downturn began, surpassed only by three weeks in August 2016.

Operations bucked the overall trend this week, with horizontal rigs dropping sharply and vertical drilling increasing. Ten horizontal rigs shut down, while six vertical rigs began drilling. This change runs contrary to the overall effect of the shale revolution, which has meant virtually all rigs in the country drill horizontal wellbores.

Rig Count Dips

Source: EnerCom Analytics

The heart of current oil and gas drilling was flat this week, with both Texas and the Permian holding steady. The largest increase in state-level rig count came in Wyoming, where two rigs began drilling. One rig came online in Alabama, Louisiana and Pennsylvania. Three rigs shut down in West Virginia, two stopped drilling in Colorado and New Mexico, and one came offline in Alaska and North Dakota this week.

Most major basins were steady in the week, with only five showing any change in drilling activity. Two rigs came online in the Granite Wash and one began drilling in the Mississippian. Three stopped drilling in the Cana Woodford, two shut down in the Marcellus and one ceased activities in the Williston.

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