U.S. drilling rig movement was modest during the week ending Friday, according to Baker Hughes Inc. (BHI). Even the Permian Basin was steady at 218 rigs running, the same as last week.
But maybe operators in the Permian are just taking a breather after posting some recent robust gains in rig activity.
“Productivity improvements are making the Permian the lowest-cost source of incremental oil production,” analysts at PointLogic said in a note Thursday. “Since reaching a low in May 2016, Permian rigs (including Permian New Mexico) are up by 69, a 50% increase from bottom…
“In fact, 52% of all the rigs added in the Lower 48 states since May have been in the Permian. At current oil prices, the Permian is the only oil play with superior economics, hence about 40% of all rigs operating in the Lower 48 are now in the Permian.”
Overall, though, the U.S. land-based count was even with the previous week; one rig left the inland waters. And that was it, according to BHI. Canada was a different story.
North of the border, 22 rigs came back to action, making for 176 actives at week's end. Thirteen Canadian oil rigs returned, accompanied by 10 natural gas rigs. One "miscellaneous" rig left play.
Alberta was the big gainer, adding nine rigs to end at 114 active. British Columbia added three to end at 19, and Saskatchewan was up eight to end at 35. Two rigs were added in Manitoba, growing its tally by 50% to six active.
In the United States, 568 rigs were running at week's end, with 546 of these being land-based. Two oil rigs were added while two natural gas rigs were subtracted along with one "miscellaneous" rig. Two horizontal rigs left while one vertical returned.
Texas was the big gainer, adding six units to end at 268. Three rigs came back to the Eagle Ford Shale, but the Barnett Shale and Permian Basin were steady with the previous week.
BHI said recently that the average U.S. rig count for October was 544, up 35 from the 509 counted in September and down 247 from the 791 counted in October 2015. The average Canadian rig count for October was 156, up 15 from the 141 counted in September and down 28 from the 184 counted in October 2015.
The international rig count for October was 920, down 14 from the 934 counted in September and down 191 from the 1,111 counted in October 2015. The international offshore rig count for October was 200, down 21 from the 221 counted in September and down 70 from the 270 counted in October 2015.
The worldwide rig count for October was 1,620, up 36 from the 1,584 counted in September and down 466 from the 2,086 counted in October 2015.
The Railroad Commission of Texas (RRC) issued 855 original drilling permits in October compared to 822 in October 2015. The October total included 679 permits to drill new oil or gas wells, 10 to re-enter plugged wellbores and 166 for recompletions of existing wellbores. The breakdown of well types was 211 oil, 45 gas, 562 oil or gas, 26 injection, zero service and 11 other permits.
In October RRC staff processed 445 oil, 203 gas, 20 injection and zero "other" completions compared to 1,138 oil, 196 gas, 53 injection and nine "other" completions in October 2015. Total well completions for 2016 year to date are 9,405, down from 17,545 recorded during the same period in 2015, RRC said.