The U.S. natural gas rig count fell one unit to 106 during the week ended Friday (March 20), according to data from Baker Hughes Co. (BKR), while a sharp drop in the oil patch suggested producers are coming to grips with a grim new reality for crude markets.

Oil-directed drilling in the United States plummeted 19 units to 664 rigs, dropping the combined U.S. rig count to 772, down from 1,016 at this time last year.

All of the declines occurred on land for the week. Horizontal rigs fell by 17, joined by four vertical rigs exiting the patch. Directional rigs increased by one on the week, according to BKR.

The Canadian rig count fared even worse, falling 77 units overall to end at 98, down from 105 in the year-ago period. The oil-directed count fell by 63 units, with 14 gas-directed rigs also packing up shop.

The combined North American count dropped to 870 overall, down from 1,121 at this time last year.

Among major plays, the Permian Basin saw the lion’s share of retrenchment during the period, with 13 rigs exiting to drop the play to 405, versus 459 a year ago. The Cana Woodford, Eagle Ford Shale and Williston Basin each dropped one rig, while the Granite Wash added one.

Among states, Texas and New Mexico posted the sharpest losses, mirroring the drop-off in the Permian. New Mexico’s count fell five units to 112 (104 a year ago), while Texas dropped 11 rigs to fall to 397 (497 a year ago).

Also among states, Oklahoma dropped three rigs week/week, while North Dakota dropped one.

Texas regulators are considering a change to policy that could allow the state’s producers to curtail oil output in light of the epic decline in crude pricing.

The Railroad Commission of Texas (RRC) has not proposed a formal change in prorationing oil production yet for exploration and production (E&P) operators, a spokesperson for Chairman Wayne Christian told NGI’s Shale Daily.

“A couple of Texas producers have inquired into the feasibility of the Railroad Commission prorationing production,” said Travis McCormick. “No formal change in policy has been proposed. Staff is looking into what that change in policy would entail from a practical standpoint at the agency.”

U.S. E&Ps have had to swiftly alter their 2020 plans in response to the upheaval in crude prices. West Texas Intermediate prices have collapsed to near $20/bbl on a combination of coronavirus demand impacts and the breakout of a price war between Russia and the Organization of the Petroleum Exporting Countries.