In the last Baker Hughes Inc. rig count of 2016, Texas and Oklahoma added a combined 10 rigs while the U.S. land-based tally grew by 13 to 627. The number of active U.S. oil rigs reached a level not seen since January, bringing a, perhaps, encouraging end to a year that most in the energy patch would probably rather forget.
Three rigs also rejoined the hunt in the U.S. inland waters, making for a weekly U.S. gain of 16 units to bring the U.S. total to 653, down from 700 a year ago.
Thirteen U.S. oil rigs returned, joined by three natural gas rigs. Four were directionals, 14 were horizontals; two vertical rigs left play. At week’s end, 523 oil rigs — the most since January — and 129 gas rigs were running, still down from year-ago tallies of 538 and 162, respectively.
Canada dropped 10 oil rigs and three gas rigs, which was partially offset by the return of three “miscellaneous” rigs. Overall, the North American count was up by six to 877, surpassing the year-ago tally of 826.
In Oklahoma, six rigs were added to bring the state’s tally to 84, not too far off the year-ago level of 88. Texas added four rigs to end at 321 running, just surpassing the year-ago tally of 319. The Texas gain was driven by a four-rig addition in the Permian Basin.
In a Thursday U.S. natural gas note, Societe Generale analyst Breanne Dougherty wrote that “domestic production is the headline story of the year. At an average of just over 72 Bcf/d, production will post its first year-on-year decline looking all the way back to the 2005 start of our dataset…
“For the first time since the rise of shale, the market is not in production growth mode as it enters the New Year. As a matter of fact, production, at a 30-day average of 71 Bcf/d, is currently lagging below our base-case winter 2016-2017 production expectation of 72.5 Bcf/d.”
As the year draws to an end, it’s still Halloween season in the Railroad Commission of Texas (RRC) production dataset.
RRC said preliminary Texas October production was 73.57 million bbl of crude oil and 582.14 Bcf of total natural gas from oil and gas wells. These preliminary figures are based on production volumes reported by operators and will be updated as late and corrected production reports are received. Production reported for the same period last year was: 74.69 million bbl of crude oil, which was later updated to a current figure of 90.08 million bbl; and 636.23 Bcf of total gas, which was later updated to a current figure of 739.71 Bcf.
October production came from 181,637 oil wells and 91,812 natural gas wells.
In the last 12 months, total production was 987 million bbl of crude oil and 8.1 Tcf of total natural gas. Crude production is from oil leases and does not include condensate.
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