The total number of rigs drilling for oil and gas in the United States remained unchanged in the week ended August 18, 2015, according to information from Baker Hughes (ticker: BHI). The total number of active rigs stayed flat at 884 this week.
The number of rigs drilling for oil increased by two, to 672 rigs, while the number of rigs targeting gas declined by two, to 211 this week. Texas saw the largest increase on a state-by-state basis, adding six rigs to its count for a total of 389. Other states to make gains this week included Alaska (3), Colorado (2), Kansas (2), and Wyoming (2). Louisiana and Oklahoma each laid down 4 machines over the course of the last week.
The number of rigs in Canada increased slightly to 211 from 208 this week, as the Canadian drilling season continues to keep demand high for rigs. The split for rigs in Canada is roughly even, with 100 rigs drilling for oil and 111 drilling for gas, according to BHI.
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EIA estimated that U.S. oil production declined by 100,000 barrels per day in July. We are not completing enough wells now to offset the decline of the wells completed in 2014. Plus, all wells completed prior to 2014 are on steady decline. Look for the rate of decline to accelerate. I believe U.S. oil production will drop to 8.5 million barrels per day by Christmas. It will continue to decline until WTI gets back over $60/bbl. If WTI stays in the $40s through year-end we will see more big cuts to drilling budgets. It will take a big increase in the active rig count to reverse the declines. - Dan
Active Drilling Rigs - August 14
Active Drilling Rigs - August 14
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group