Active Rig Count - Sept 25

[dan_s]

The active rig count in North America dropped by another 10 to 1,014. The rig count will continue to drop until WTI moves back to at least $60/bbl.

The number of rigs drilling for oil in the United States dropped by 4 to 640, compared to the peak of 1,609 in October, 2014.

In Canada, the active rig count dropped to 176, compared to 429 a year ago.

The number of offshore rigs drilling in the Gulf of Mexico is 31, compared to 59 a year ago.

Plus, a lot of the companies I follow have decided not to complete the wells they've drilled.

We are not completing enough wells today to offset the rapid decline rates of the more than 50,000 horizontal wells that were completed prior to 2015. U.S. oil production has drop 600,000 barrels per day since March and my guess is that it drops another 500,000 BOPD before year-end. From April 1, 2015 to March 31, 2016 United States oil production will fall by 1.2 MILLION BARRELS PER DAY. If that doesn't get the attention of speculative oil traders than I don't know what will.

It takes ~1,000 rigs drilling for oil in the U.S. just to keep production flat. If WTI jumped to $80/bbl tomorrow it would probably take at least six months to get back to 1,000 active rigs. Remember, upstream companies will not increase their drilling budgets until they are SURE oil prices will remain at elevated levels.

[dan_s]

Eagle Ford rig count less than half of where it was last year and it will continue to fall until WTI is back over $60/bbl.

http://www.bizjournals.com/houston/morn ... 1443454412