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In its weekly release, Baker Hughes, a GE company BHGE reported a decline in weekly rig count in the United States.
More on the Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.
A change in the Houston-based oilfield services player’s rotary rig count affects demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL, Schlumberger Limited SLB, Diamond Offshore Drilling, Inc DO and Transocean Ltd. RIG.
Details
Total US Rig Count Decreases: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 983 in the week ended May 24, down from the prior-week tally of 987. With this, the tally declined for seven weeks in a row. The current national rig count is also lower than the prior year’s 1059.
The number of onshore rigs, through the week ended May 24, totaled 957, down from 961 in the previous week. However, four rigs operated in inland waters and 22 rigs worked in the offshore plays. The counts of both inland and offshore rigs were in line with the prior-week tally.
US Removes 5 Oil Rigs: Oil rig tally was 797, down from 802 in the week ended May 17. Notably, the tally for oil drilling rigs not only declined for three successive weeks, but also touched the lowest mark since March 2018.
Notably, the current total, far from the peak of 1,609 attained in October 2014, is also lower than 859 a year ago.
Natural Gas Rig Count Increases in US: The natural gas rig count of 186 is higher than the count of 185 for the week ended May 17.
However, the count of rigs exploring the commodity is lower than the prior-year weeks’ tally of 198. Per the latest report, the number of natural gas-directed rigs is 88.4%, below the all-time high of 1,606 in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 51 units against the previous week’s 48. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations also known as shale formations) declined by seven units to 932.
Gulf of Mexico (GoM) Rig Count Flat: The GoM rig count is 22 units, of which 19 were oil-directed. The count was in line with the prior-week tally.
Conclusion
Three oil drilling rigs were removed from each of Permian and Cana Woodford basins. This led to a drop in total rig count operating in the United States. Notably, Permian – the most prolific basin in the United States which employs roughly half of the nation’s total rigs – has seen a decline in oil drilling rigs in the last six consecutive weeks. Investors should also note that the waning oil rig count reflects conservative spending by some of the drillers in the nation.