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Three NatGas Rigs Pack It In During Week of Little Change

The U.S. land rig count retreated by three units during the week ending Sept. 16, according to Baker Hughes Inc. (BHI). With the loss of one inland waters rig and the return of two offshore, the United States ended the week down two units at 506. Meanwhile, many of today's shale wells are getting long in the tooth, Societe Generale said.

Of these, 482 were running on land. The week ended with 416 oil rigs, up two from a week ago; and 89 natural gas rigs, down three from a week ago. One U.S. "miscellaneous" rig was also lost during the week. Two horizontal rigs departed while the tallies for directional and vertical units were static.

Oklahoma increased its rig count by three units to end the week at 65 running. Oklahoma is home to the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties (STACK), and the South Central Oklahoma Oil Province, or SCOOP. At week's end, there were eight SCOOP rigs running, up one; and 23 STACK rigs running, static with the previous week.

“Many producers, even those with prime acreage in the Bakken and Eagle Ford, have been focusing their capital on the SCOOP and STACK, where wells are yielding exceptional results, and they keep getting better,” analysts at Barclays said in a recent note. The Cana Woodford -- home to the SCOOP and STACK -- is the third most active drilling location in the country, behind the Permian Basin and not far behind the Eagle Ford, they noted.

Texas lost one rig to end the week at 244. BHI found one lone rig in the Barnett Shale after the departure of two. The Eagle Ford Shale was steady at 38 rigs. The Permian Basin gained two rigs to end at 202. The Delaware sub-basin gained three rigs, but the Midland lost two while the "rest of the Permian" saw an increase of one.

The Railroad Commission of Texas (RRC) issued 660 original drilling permits in August compared to 864 in August 2015. The latest total included 512 permits to drill new oil or gas wells, eight to re-enter plugged well bores and 140 for recompletions of existing well bores. By category, 203 oil, 24 gas, 392 oil or gas, 26 injection, zero service and 15 other permits were issued.

Most other plays and states were steady or up/down by not more than two units. Lights are still out in the Fayetteville and Arkansas at large, Kansas, too, which is still down nine units from a year ago.

In August RRC staff processed 545 oil, 223 gas, 46 injection and eight other completions compared to 1,113 oil, 172 gas, 36 injection and 11 other completions in August 2015. Total well completions for 2016 year to date are 8,107, down from 14,665 recorded during the same period in 2015.

In Canada, two rigs left the game to leave 132 running. Of these, 75 were directed at oil and 56 at natural gas. During the week, three natural gas rigs left, but one oil rig returned. North America saw a net decline of four rigs to rest at 638 running.

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