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Sharp Drop in Oil Activity Sees U.S. Drilling Total Fall in Latest BKR Count
Driven by a sharp pullback in oil-directed activity, the combined U.S. rig count fell four units to 771 for the week ended Friday (Jan. 20), according to updated numbers from oilfield services provider Baker Hughes Co. (BKR).
Changes domestically included a 10-rig decline in oil-directed rigs, partially offset by an increase of six natural gas-directed units. Land drilling declined by one rig overall, while the Gulf of Mexico count fell three units to end at 16. Vertical rigs dropped four units week/week, while directional and horizontal rig totals were unchanged domestically.
The combined 771 active U.S. rigs as of Friday compares with 604 rigs running in the year-earlier period, according to the BKR numbers, which are partly based on data from Enverus.
Canada’s rig count, meanwhile, surged 14 units higher week/week to finish at 241, up from 212 in the year-ago period. Gains there included 12 oil-directed rigs and two natural gas-directed rigs.
Counting by major drilling region, the Permian posted a two-rig decline for the period, dropping its total to 354, versus 292 a year ago. The Haynesville and Utica shales each added one rig, while the Ardmore Woodford, Eagle Ford Shale and Marcellus Shale each posted one rig declines for the period, according to the BKR numbers.
In the state-by-state breakdown, Louisiana dropped three rigs from its total to fall to 64, versus 56 at this time last year. Alaska and New Mexico each saw one-rig declines, while one rig was added week/week in Texas.
Only a few U.S.-based exploration and production (E&P) companies have provided formal capital spending plans for 2023, but expenditures overall are forecast to decelerate from a year ago.
E&P executives are surveyed twice a year by Evercore ISI to determine the level of capital expenditures (capex) and activity, which often are revised. Respondents indicated that global spending should continue to rise, up by 14% from 2022. However, it’s down from the rate of increase in 2022, when capital spending jumped 20% overall from 2021.
North America, however, is still seen with a solid gain in capex for 2023. “While we forecast growth to decelerate in both North America and internationally, North America’s impressive 18% end-of-year growth follows a near record 44% in 2022,” said Evercore managing director James West.
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