Active Rig Count continues to fall - August 30

[dan_s]

Baker Hughes reports the number of rigs drilling for oil dropped by 12 last week and 120 in the last twelve month.
https://rigcount.bhge.com/na-rig-count

OIL HORIZONTAL RIG COUNT SHOULD BE WATCHED
"A drop in the oil-directed horizontal rig count last week ... should be closely watched as investors remain keenly focused on the needed rationing of upstream capital and the potential support this could lend to 2020 balances," Evercore ISI Group Stephen Richardson said in a late Wednesday note.

Richardson added that the Baker Hughes rig count was down by 18 week on week, the second-largest weekly decline since early 2016. Baker Hughes uses Enverus RigData in its own rig count calculations.

Analysts have noted a second "merger of equals" among midcap companies was announced Monday - PDC Energy's acquisition of SRC Energy, following Callon Petroleum's move in July to take out Carrizo Oil & Gas - may be the next industry trend that builds scale and removes costs for oil companies.

"It's hard to ignore the slow simmer of corporate M&A in the sector," Richardson said. "The reality is efficiencies are [slowing] and there does not look to be much lemon to squeeze for many, but the industry is self-sufficient at a low-$50s/b WTI price."

Permits approved were also up on the week to 983, a gain of 89. The biggest number came from the DJ Basin, up by 143 permits to 243, and the Wet Marcellus, up 28 permits to 31.

In the Permian, the number of approved permits was down 23 to 127. Otherwise, the number permits up or down was under 15 for the US' eight large named basins.

-- Starr Spencer, starr.spencer@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com