Despite relatively low rig activity, the Utica shows the strongest gains in production efficiency since January 2014
Baker Hughes Industries (ticker: BHI) released its weekly update on the number of rigs operating in the United States Friday, showing ten more rigs active in the country from last week. The Permian remains the most active basin in the country, but despite improvements made to drilling and completions in the region, the Utica shows the greatest improvements in terms of production per well of any play in the U.S., according to EnerCom Analytics.
EnerCom’s Effective Rig Count for the Utica
Using EnerCom’s Effective Rig Count (EERC), EnerCom has found that wells in the Utica are producing 4.2x as many barrels of oil equivalent on an individual basis in January 2017 (the last month with available data for both rigs and production) than wells in the region were producing in January 2014, when oil prices were at their peak. The Utica’s performance exceeds even the Permian, where wells were producing 3.4x more on an individual basis in January 2017 compared to three years earlier.
Across the entire United States, rigs in January of 2017 were producing 3.0x more on a per well basis than they were in January 2014, underlining how far efficiencies have improved over the course of the downcycle.
U.S. rig count up 117% in absolute terms from a year ago
Looking at the week ended February 17, the total number of rigs in the United States climbed ten to 751, according to Baker Hughes. Oil prices stabilizing above $50 per barrel have spurred more drilling, with the rig count currently 237 higher than at this point last year, representing a 117% increase from the same week last year. Six of the added rigs were targeting oil while the remaining four drilled for natural gas.
Looking at the rig count by basin, the Permian continues to show the most activity with 303 rigs, up two from last week. The Granite Wash reported five additional rigs, the Haynesville reported three added rigs, and the Barnett and Eagle Ford each reported two added rigs. The Cana Woodford and Williston reported losses of two rigs and one rig, respectively.
Despite the largest increases in terms of efficiencies over the last three years, the Utica remains one of the least active regions in terms of rigs. Baker Hughes reported no net change week-over-week, with the total standing at 21 rigs.
