Offshore activity down by one-third since July

Drilling activity decreased last week as operators approach equilibrium in the current oil price market, according to Baker Hughes’ Weekly Rig Count.

The total number of rigs active in the U.S. fell by three last week, bringing the total number of rigs in the country to 946. One land-based rig shut down, and two offshore rigs went offline, bringing the total number of land and offshore rigs to 927 and 16, respectively.

Offshore rigs have fallen significantly in recent weeks, dropping by one-third since the end of July. This is most likely due to the hurricane season, as evacuating to avoid a hurricane can make projects significantly more expensive.

Activity shifted away from oil targets last week, with five oil-targeting rigs coming offline. One gas-targeting rig became active, and one “miscellaneous” rig also came online. This rig, which is drilling a directional trajectory in California, is the first reported miscellaneous operation since mid-June.

Directional rigs outnumber horizontals by most ever

Operations also shifted toward directional trajectories, with five directional rigs coming online. Two horizontal rigs shut down last week, while six vertical rigs ceased activity. In total, there are 799 horizontal rigs, 81 directional rigs and 66 vertical rigs active in the U.S. Fifteen more directional rigs than vertical rigs is a new record, and only the tenth week that directional rigs have ever outnumbered horizontal rigs.

Rig Count Falls by Three as Operations Stabilize

Source: EnerCom Analytics

Despite the overall decrease, activity in California and New Mexico increased last week, with two and one rig coming online, respectively. Alaska, Louisiana, Oklahoma and Utah each saw one rig shut down last week, and two came offline in North Dakota.

Among the major basins tracked by Baker the Cana Woodford saw the largest increase in activity, with four rigs becoming active. In addition, activity in the Ardmore Woodford doubled from one operational rig to two. Activity decreased in the Granite Wash, where one rig shut down, and in the Mississippian and Williston, which each saw rigs decrease by two.

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