Active Rig Count - Mar 4

[dan_s]

The North American active rig count continues to fall rapidly. I cannot remember EVER seeing a decline of this magnitude.

United States:
> The number of rigs drilling for oil declined by 8 to 392, compared to 1,609 in October, 2014
> The number of rigs drilling for natural gas declined by 5 to 97, compared to 268 a year ago and over 600 at the peak in 2014.

We need double this amount of rigs drilling for oil & gas in the United States just to hold production flat.

The number of rigs drilling in Canada declined by 46 to 129, compared to 300 a year ago. I think the Canadian rig count will drop to 50 in the 2nd quarter.

The active rig count is expected to continue to fall well into the 2nd quarter. I do not expect it to stabilize until WTI is back over $50/bbl. It will take at least $70/bbl before we see a meaningful increase in the number of active rigs. There has been too much damage to the oilfield services firms and the upstream companies will not increase capital expenditures until they are absolutely sure oil & gas prices will remain elevated. The seeds of the next oil crisis have been planted and breaking through, just like spring flowers in Texas.