Active Rig Count - Sept 9

[dan_s]

The North American active rig count increased by 11 last week.

United States:
> The number of rigs drilling for oil increased by 7 to 414, compared to 652 a year ago and 1,609 in October, 2014 (the peak)
> The number of rigs drilling for gas increased by 4 to 92, compared to 196 a year ago

Canada:
> The number of rigs drilling for oil declined by 3 to 74, compared to 70 a year ago
> The number of rigs drilling for gas declined by 1 to 59, compared to 115 a year ago

The decision by an upstream company to add more drilling rigs has months of lead time. This is why the number of rigs drilling for gas remains so low. I doubt we week a significant increase in drilling for gas until gas is firmly above $3.50/mmbtu, which is where I think it will be six months from now.

The rigs drilling for oil are the best rigs in the best areas. More than 60% of the active rigs in the United States are in Texas and Oklahoma because the Permian and SCOOP/STACK have areas were well level economics are good at $40/Bbl oil.

Only 35 rigs are drilling in Ohio and Pennsylvania, which is why Marcellus/Utica gas production is declining. The area with the most significant decline in gas production is the Eagle Ford.