Oil and gas drilling in North America appears to be on the upswing, according to oil and gas industry service companies that keep track of offshore and onshore statistics. Offshore drilling in the Gulf of Mexico was up in July more than 5% over a year ago, according to GlobalSantaFe Corp.; Baker Hughes. Inc. found that the number of rigs actively exploring domestically has increased since the beginning of the month; and the Canadian service sector reports a summer drilling boom is more than making up for a slow spring.

Baker Hughes Inc. reported that the total North American rig count rose 30 last week to 1,501. For the same period a year ago, the count was 1,072. The number of rigs actively exploring for oil and natural gas both onshore and offshore in the United States increased last week by 22 to 1,096. Of that number, 933 were exploring for natural gas, 13 more than the week before. There also were 158 were looking for oil, up 13 from a week earlier. Another five rigs were listed as miscellaneous. A year ago last week, the domestic rig count was 853.

In the U.S. offshore last week, Baker Hughes said the number of rigs rose by five from a week earlier to 107. However, for the same period of 2002, there were 109 U.S. rigs running offshore. In the largest producing states compared with a week earlier, Baker Hughes said Texas was up 10 rigs; Louisiana, six; New Mexico, five; and California and Oklahoma each gained two. Wyoming lost two rigs and Alaska was unchanged.

In Canada a drilling boom, delayed by adverse weather in the spring, now is racking up enough new wells to cause the Alberta Energy and Utilities Board to predict a possible increase in the chief Canadian gas producing province’s capacity by 1.5% or 200 MMcf/d this year into a range of 13.3-13.4 Bcf/d. Signs of the year setting a Canadian field activity record are already apparent. Summer drilling is exceptionally strong, with about two-thirds of the industry’s 670 land rigs busy around the clock seven days a week.

The Petroleum Services Association of Canada is forecasting 18,470 wells by the end of this year, topping the previous Canadian high of 18,255 in 2001 by 1%. The 2003 pace in Canada will be 17% faster than 2002, when shaky prices in the first half of the year slowed activity down to 15,829 wells (see Daily GPI, Aug. 11).

GlobalSantaFe’s latest statistics, compiled for June and reported in its latest Summary of Current Offshore Rig Economics (SCORE), found that the Gulf of Mexico rig count had increased 7.2% from May. Compared with last year, the count was up 5.1%. However, drilling offshore is down 47.2% compared with five years ago. Worldwide, the June 2003 offshore SCORE was up 3% from May. In the past year, however, drilling worldwide has declined 10.1%, according to the data. It also is down 45.9% from five years ago.

SCORE compares the profitability of current mobile offshore drilling rig dayrates to the comparable dayrates at the 1980-81 peak of the drilling cycle. SCORE averages 100% in 1980-81, with new contract dayrates equalling the sum of daily cash operating costs plus about $700/d of million dollars invested.

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