The U.S. rig count endured another round of losses during the week ended Friday, falling five units to 817, with the declines owing to a slowdown in oil-directed activity, according to data from Baker Hughes Co. (BKR).
The net change for the week included a decline of seven oil rigs, partially offset by the addition of two miscellaneous units. The domestic count is down sharply from the 1,081 rigs active in the year-ago period.
Land drilling fell by six units for the week, while the Gulf of Mexico added one rig. Seven horizontal rigs joined one vertical rig in exiting the patch, while three directional units were added, according to BKR.
In Canada, a decline of six gas-directed rigs offset a gain of four oil rigs to drop the Canadian count two units overall to 140. That’s down from 196 at this time last year. The combined North American rig count slid seven units to 957, versus 1,277 in the year-ago period.
Among major plays, the Permian Basin and Eagle Ford Shale accounted for the brunt of the slowdown for the week. The Permian saw four rigs pack up shop, dropping its total to 412, down from 492 a year ago. The Eagle Ford fell to 60 active rigs, down three week/week and down from 76 at this time last year, BKR data show.
The Williston Basin dropped one rig overall on the week, while the Cana Woodford added one unit.
Among states, New Mexico dropped four rigs from its total, in line with the slowdown in the Permian, while Texas saw three rigs exit. Alaska and California each added one rig, while North Dakota dropped one.
U.S. shale and tight oil production is forecast to slow in 2020 before flattening out in 2021, researchers with IHS Markit said.
An oil market fundamentals forecast issued Wednesday indicated domestic production growth should be 440,000 b/d in 2020 and remain at that level in 2021. Modest growth is expected to resume in 2022.
However, the Lower 48 volumes still would be in stark contrast to the boom levels of recent years, according to Vice President Raoul LeBlanc, who oversees North American unconventionals.
“Going from nearly 2 million b/d annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers,” said LeBlanc. “This is a dramatic shift after several years where annual growth of more than 1 million b/d was the norm.”
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