Daily GPI / NGI The Weekly Gas Market Report / Infrastructure / U.S. Rig Count Summary / Canadian Rig Count Summary

U.S. Adds Four NatGas Rigs; Oil Drilling Pullback Continues

A gain of four natural gas-directed drilling rigs in the United States for the week ended Friday couldn’t make up for declines in oil-directed drilling, and the U.S. rig count fell by one to end at 935, according to data compiled by Baker Hughes Inc. (BHI).

The Permian Basin had a good week, adding six rigs, but that wasn’t enough to prevent the ongoing pullback in the U.S. rig count from continuing.

In the United States, five horizontal rigs packed up during the week as three directional rigs and one vertical rig returned, according to BHI. The Gulf of Mexico added two rigs for the week and now stands at 19 rigs, down one from its year-ago tally.

Oil-directed drilling fared better in Canada, which added 10 oil rigs while dropping two gas-directed units to finish at 220.

That left the combined North American rig count at 1,155 rigs, up seven week/week and far surpassing the 649 rigs running in the year-ago period.

The broader declines in U.S. oil drilling for the week didn't phase the Permian Basin, which was the biggest mover among plays, according to BHI's breakdown. The West Texas and southeastern New Mexico play finished at 386 rigs versus 201 a year ago.

But the gains in the Permian came as the Eagle Ford Shale -- faced with production impacts from last month's Hurricane Harvey -- and North Dakota's Williston Basin each saw three rigs pack up shop for the week. The Eagle Ford stood at 68 rigs as of Friday, with the Williston at 49 active rigs, according to BHI.

The Denver Julesburg-Niobrara formation in Colorado saw two rigs dropped for the week to end at 26, while the Cana Woodford (63 rigs) and Granite Wash (14 rigs) each ended the week down one rig.

Among the states, Louisiana added three rigs to finish at 65, but those rigs didn't go to work in the Haynesville Shale, which dropped a rig and stood at 45, according to BHI.

The weekly gains in the Permian -- amid declines most everywhere else -- come as the play continues to attract capital from producers and midstreamers. Halcon Resources Corp. announced it is selling its remaining nonoperated assets in the Williston Basin as it transitions to a Permian pure-play. Oryx Midstream Services II LLC said it plans to builda 220-mile crude oil transportation pipeline in the Permian's Delaware sub-basin.

Meanwhile, as exploration and production companies aggressively develop the Permian, geological constraints could arise and lead to production shortfalls and potentially higher prices early in the next decade, according to an analysis by Wood Mackenzie.

"Fully modeling the potential impact of the latest breakthrough technologies reveals measurable upside to Permian peak production," said consultants. "However, downside risks related to tighter well spacing and well-on-well interference, could bring peak Permian production forward by four years compared to the upside case, putting more than 1.5 million b/d of future production in question."

ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by Jeremiah Shelor

Comments powered by Disqus