U.S. added the most land rigs since April 2015
The U.S. rig count has finally exceeded 900 rigs, according to Baker Hughes’ (ticker: BHI) most recent weekly rig count.
American land rigs added 14 for a total of 878 rigs online. This is the highest number of land rigs active in the U.S. since April 2015, a few months after the downturn had begun. An additional two offshore rigs came online, meaning there are now 901 rigs active in the U.S. this week.
In keeping with the positive news with respect to oil company operations, oil prices pushed back over the $50 mark today, for WTI near month contracts, with late day oil trading at the day’s high of $50.53 per barrel.
Add ‘em up: it’s a recovery
This week is the eighteenth-straight week of added rigs in the U.S., as the recovery continues. Since the rig count bottomed out just under one year ago the U.S. has added rigs in all but five weeks.
Rigs evenly split oil and gas targets this week, with additional eight rigs targeting each. Despite this even distribution oil targets dominate the current environment, with 720 oil-targeting rigs compared to only 180 gas-targeting rigs.
Horizontal rigs accounted for all added rigs this week, with 17 more rigs active this week. One vertical rig came offline, while directional rigs were flat.
Texas now has 11 more rigs working than all of North America did last year
Texas added another eight rigs this week, for a total of 459 active rigs. This is 11 more than the total number of rigs active in North America last year, near the bottom of the downcycle. Several other states picked up more rigs, with Oklahoma adding four, Louisiana, Pennsylvania and Wyoming adding two and New Mexico and Ohio adding one. One rig came offline in Alaska, while two left Colorado.
Permian adds most
The Permian added the most rigs yet again, with four more bringing the basin’s total to 361. Somewhat surprisingly, the Mississippian added three rigs, or 50% of last week’s total. Two rigs came online in the Marcellus and Eagle Ford, while the Barnett, Haynesville and Utica each added one. One rig shut down in the Granite Wash and two came offline in the DJ-Niobrara.
In 2017 fewer rigs yield higher production
BHI = Baker Hughes weekly rig count released May 19, 2017. EERC = EnerCom Effective Rig Count conversion to the number of rigs that would have been required in Jan. 2014 to achieve today’s current (EIA) production in each basin before 2017 drilling and completion technologies. Basin map: EIA; data: Baker Hughes, EIA and EnerCom.
EnerCom’s Effective Rig Count illustrates how dominant the Permian is in the industry, and how the industry has improved since the downturn. The current production in the Permian would have taken 1,109 rigs back in January 2014, before the downturn. Now less than one third of that number are needed to generate the same production. EnerCom illustrates this with its EnerCom Effective Rig Count.
Baker Hughes reported 357 rigs active in the Permian basin this week. The EIA, which last published its data for April is the base from which the EERC is computed. EIA considers slightly different locations as part of the Permian as it calculated that 337 Permian rigs were online. No matter which group is considered, though, it takes fewer rigs to create the amount of production as operators were getting in 2014, the EERC’s baseline year.
The story is the same throughout the U.S., as continually improving technology lets producers produce more with less.
