EERC down by 11 in September
EnerCom released its monthly EnerCom Effective Rig Count for September today, reporting an equivalent 2,292 rigs active in the U.S., down from 2,303 last month. The Effective Rig Count adjusts reported rig counts for increasing efficiency in drilling and completions, meaning production factors into the count.
Drilling activity in the U.S. is declining slightly, as operators attempt to find an equilibrium. This has led to the second decline in a row in the Effective Rig Count. There was a total drop of 11 effective rigs in September, compared to a reported drop of three. The productivity of each rig also decreased, as completions activity continues to lag drilling.
The average modern rig is now yielding over 2.8 times more production than the average rig did in January 2014, reflecting improvements from new technologies and techniques. This is a significant amount of efficiency, but falls short of the 3.3 times more production that was achieved in mid-2016.
The Utica basin remains the most-improved, as modern rigs are yielding 5.2 times more production than 2014 rigs were. The Utica also saw the largest increase in Effective Rig Count this month, adding five rigs.
The largest decrease in ERC came from the Niobrara, where a slight increase in productivity was not enough to offset a drop in reported rigs of three. The basin’s Effective Rig County fell by 10 in September. Other decreases were seen in the Eagle Ford, Permian and Bakken.
Each basin expected to grow production: EIA
The EIA predicts that basins will all see growth in the next month, with increasing production from every basin it tracks individually. The Permian will, of course, account for the largest increase in oil production. Unusually, however, the Eagle Ford will rank second to last in oil production growth, ahead of only the Haynesville. This is likely due to the residual effects of Hurricane Harvey, which impeded operations in the basin in direct and indirect ways.
The largest growth in gas production will come from the Marcellus, which is predicted to add 207 MMcf/d of output. Other significant increases will come from the Utica, Permian and Haynesville.
DUCs Up to 7,270
Unlike in many previous months, the number of drilled uncompleted wells held steady or grew in every basin in September. A total of 7,270 DUCs are now waiting on completions. The largest increases in DUC count came from the basins with the largest number of such wells, the Permian and Eagle Ford. These two basins account for a combined 3,860 uncompleted wells, a count that grew by 136 in September. These wells keep the Effective Rig Count of the basins low, as it takes large efficiency improvements to outweigh the fact that rigs are drilling wells that have not been completed yet.
