With front-month natural gas futures prices ranging between $5.50-7.50/Mcf and front-month crude prices ranging between $56-63/bbl during the month of October, U.S. producers found that it was still profitable to drill new wells, according to a new rig count study from Baker Hughes. The number of rotary rigs scouring the United States for oil and natural gas during the month of October decreased marginally from September, but recorded a significant increase over October 2005, according to the drilling services provider.
The U.S. onshore and offshore combined rig count for October was 1,734, down five from the 1,739 counted in September and up 255 from the 1,479 counted in October 2005. The U.S. offshore drilling rig portion of that count stayed fairly stagnant, with 90 U.S. offshore rigs active in October, 92 during September and 87 during October 2005.
Baker Hughes said the Canadian onshore and offshore combined rig count for October was 431, down 15 from the 446 counted in September and down 110 from the 541 counted in October 2005. Canadian offshore rigs also remained steady over that timeframe with four active during October, five during September and five during October 2005.
Futures prices were a little different in October 2005, at least for natural gas. Following the destruction of Hurricane Katrina in late August, which shut in a significant number of wells, front-month natural gas futures in October 2005 were trading between $12.00 and $14.75/Mcf, while crude futures were trading between $59.00 and $66.50/bbl.
In international markets (excluding U.S. and Canadian onshore and offshore activity), the rig count for October was 965, up 16 from the 949 counted in September, and up 62 from the 903 counted in October 2005. The international offshore rig count for October was 274, up 10 from the 264 counted in September and up 10 from the 264 counted in October 2005, Baker Hughes said.
The worldwide rig count for October was 3,130, down 4 from the 3,134 counted in September and up 207 from the 2,923 counted in October 2005.
The rotary rig counts conducted by Baker Hughes are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States, Canada and international markets. The company has issued the rotary rig counts as a service to the petroleum industry since 1944.
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