Active Rig Count - August 19
Posted: Fri Aug 19, 2016 1:46 pm
The North American active rig count increased by 5.
United States:
> The number of rigs drilling for oil increased by 10 to 406, compares to 674 a year ago and 1,609 in October, 2014
> The number of rigs drilling for gas was unchanged at 83, compared to 211 a year ago
Canada
> The number of rigs drilling for oil was unchanged at 65, compared to 97 a year ago
> The number of rigs drilling for gas declined by 4 to 56, compared to 111 a year ago
This is still way below the number of active rigs needed to hold production flat. Several companies are completing more DUCs, which will slow the decline for awhile.
IEA's Drilling Productivity Report tells us what is happening in the seven largest producing basins: http://www.eia.gov/petroleum/drilling/#tabs-summary-2
Natural gas production in the large oil basins (Bakken, Eagle Ford, Permian and Niobrara) is falling by ~350 MMcfpd per month. This is all "rich gas" that is high in NGLs. We don't hear much about NGL prices, but the NGL market in the U.S. is going to be much tighter by Q4. NGL prices were up 20% to 30% for all of the companies I follow from Q1 to Q2. They should keep going up. It is very important to know the production mix of the companies you own. I set out the production mix at the bottom of each forecast model. Most companies do not hedge NGLs.
United States:
> The number of rigs drilling for oil increased by 10 to 406, compares to 674 a year ago and 1,609 in October, 2014
> The number of rigs drilling for gas was unchanged at 83, compared to 211 a year ago
Canada
> The number of rigs drilling for oil was unchanged at 65, compared to 97 a year ago
> The number of rigs drilling for gas declined by 4 to 56, compared to 111 a year ago
This is still way below the number of active rigs needed to hold production flat. Several companies are completing more DUCs, which will slow the decline for awhile.
IEA's Drilling Productivity Report tells us what is happening in the seven largest producing basins: http://www.eia.gov/petroleum/drilling/#tabs-summary-2
Natural gas production in the large oil basins (Bakken, Eagle Ford, Permian and Niobrara) is falling by ~350 MMcfpd per month. This is all "rich gas" that is high in NGLs. We don't hear much about NGL prices, but the NGL market in the U.S. is going to be much tighter by Q4. NGL prices were up 20% to 30% for all of the companies I follow from Q1 to Q2. They should keep going up. It is very important to know the production mix of the companies you own. I set out the production mix at the bottom of each forecast model. Most companies do not hedge NGLs.