In the major basins rig increase is nil; but oil popularity nears all-time high
Drilling activity fell this week, marking the second straight decrease in operational rigs, according to Baker Hughes’ Weekly Rig Count.
A net seven rigs shut down this week, the largest decrease since early November. Three land-based rigs shut down, while two offshore and inland waters rigs stopped drilling. This leaves 1,032 land, two inland waters and 18 rigs operational, for a grand total of 1,052 rigs drilling in the country.
Gas drilling declined in popularity this week, with six such rigs shutting down. Only one oil-targeting rig came offline this week, meaning there are 862 oil, 188 gas and two miscellaneous rigs active in the U.S. This means oil drilling accounts for 81.9% of all activity in the country, the highest proportion of oil targets since August 2016. The current proportion of oil drilling is near the all-time high of 83.4% set in 2014. Baker Hughes has recorded ‘commodity targeted’ since 1987, 1,615 different weeks. Only 39 weeks in that period have seen oil drilling account for a larger share of activity than today.
Directional drilling also declined in popularity this week, with five directional rigs shutting down. Two horizontal rigs also came offline, while vertical rigs held steady. There are 62 directional, 930 horizontal and 60 vertical rigs currently operating in the country.
Only two states saw increases in activity this week, Alaska and Wyoming, which added two and one rig respectively. One rig shut down in Colorado, North Dakota, Pennsylvania and Texas, while two came offline in Oklahoma and four stopped drilling in Louisiana.
There were no increases in activity in any of the major basins tracked by Baker, a rare occurrence. The last time this happened was in April 2016, immediately before rig counts bottomed out during the downturn.
This week saw one rig shut down in the Haynesville, Marcellus, Mississippian and Williston, and two came offline in the Permian. This marks the second week of declining rig counts in the Permian. While this may simply be normal fluctuations, continued declines may signal operators are responding to the punishing differentials currently seen in the play.
