New Mexico could overtake Oklahoma as No. 2

Drilling activity resumed its fall this week, more than wiping out the increase seen last week according to Baker Hughes.

A net 14 rigs shut down in the week, leaving 1,045 rigs operational. Thirteen land-based rigs came offline, while one offshore rig stopped drilling and inland waters activity stayed flat.

The rise of the Permian means New Mexico may soon be the second-most popular state for drilling. Oklahoma, which has held this spot for most of the past decade, currently has 122 active rigs, compared to 112 in New Mexico. This is the smallest difference between the states since early 2000. The surge in New Mexico rig counts has been driven wholly by the Permian, as only three out of the 112 rigs in the state are drilling in other basins.

Rig Count Slide Resumes

Source: EnerCom Analytics

Activity shifted sharply away from oil, with 15 oil-targeting rigs coming offline this week. One gas-targeting rig began operations, meaning there are now 198 gas-targeting rigs active in the country, or 18.9% of activity.

All three trajectories saw declines in activity indicating that, unlike in mid-January, conventional rigs accounted for a significant share of this week’s decline. Two directional, seven horizontal and five vertical rigs came offline in the week. Horizontal drilling now accounts for 88.5% of activity, an all-time high.

Texas activity continued to drop, with three rigs coming offline in the fourth decline in a row. The Lone Star State now accounts for 49.2% of all drilling in the U.S., down slightly from the 50.6% seen in mid-2018. Four rigs shut down in Alaska and Oklahoma, while two came offline in Alabama and one stopped drilling in Kansas, Louisiana and Montana. One rig started drilling in Florida and North Dakota.

Mississippian adds most rigs

Surprisingly, the Mississippian added the most rigs this week, with four coming online in the basin. This means there are ten rigs drilling the Mississippian, the first time the basin has seen a double-digit rig count since early 2016. All other major basins saw rig counts stay flat or decline this week, with one rig shutting down in the Arkoma Woodford and Cana Woodford and three coming offline in the Granite Wash and Permian.

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