The U.S. oil and natural gas rig count dropped by 40 in the latest Baker Hughes Inc. tally, busting through the "1,000 barrier" to rest at 988. Natural gas-directed rigs gained a smidge, though, as one analyst noted the staying power of gas production.
The standout loser among the states was Texas, which saw its rig census drop by 29 to 427, less than half what the state's count was a year ago. Not surprisingly, the Eagle Ford Shale and Permian Basin led the declines in the Lone Star State. They have the most rigs to give up, of course, since the large-scale departure from dry gas plays, such as the Barnett Shale, began long ago.
The Eagle Ford lost 12 rigs to land at 125, while the Permian dropped by 21 to end up at 264 for the week, less than half its year-ago tally of 536. Overall, U.S. oil-directed rigs fell by 42 to 760 while gas-directed rigs actually gained three to 225.
A Thursday note on the natural gas outlook from Societe Generale said gas production is outperforming its base case expectations, breaching 73 Bcf/d at the end of last month and holding a 15-day average of 72.8 Bcf/d.
"We have consistently emphasized that our summer 72.4 Bcf/d production average holds more upside than downside risk; and while the recent performance does not yet warrant an upward revision to our Cal '15 expectation, it does remove the likelihood of low production-induced bullish pressure over the next few weeks."
Societe Generale said drilling program changes that took place during the first quarter should show up in July production. "While we do not expect the program rationalization to trigger a material downward move in H2 2015 production, we do expect to see signs of a harnessing of growth, supporting our base case flat 72.4 Bcf/d production profile through the end of 2015."