The U.S. natural gas rig count fell three units to 130 for the week ended Friday, providing further evidence of North American onshore drillers slowing their activity on tighter budgets, updated data from Baker Hughes Co. (BKR) show.
Including the loss of five oil-directed units, the slumping U.S. rig count fell to 822 for the week, down sharply from 1,067 active rigs in the year-ago period.
Eight rigs departed on land, along with one from inland waters. That was partially offset by the addition of one rig in the Gulf of Mexico, which ended the week at 21 rigs, versus 18 a year ago. Eleven horizontal units packed up during the week, partially offset by the addition of two directional units and one vertical unit.
The Canadian rig count fell to 142 units after factoring in the departure of nine oil-directed rigs and the addition of four gas-directed. Canada had 198 active rigs at this time last year, according to BKR.
The combined North American rig count fell to 964 for the week, down more than 300 units from the 1,265 rigs running in the year-ago period.
Among major plays, the Marcellus Shale dropped two rigs from its total week/week, falling to 40 active units, versus 54 a year ago. The Granite Wash, Haynesville Shale, Mississippian Lime and Permian Basin each dropped one rig week/week.
Among states, Oklahoma dropped three rigs to fall to 51, down from 144 a year ago. New Mexico, Pennsylvania and Texas each dropped two rigs from their respective totals, while Alaska and Colorado each dropped one, according to BKR.
Louisiana and Utah each added two rigs overall during the week.
As the North American onshore continues to cool down, oilfield technology specialist National Oilwell Varco Inc. (NOV) is making adjustments, concentrating efforts to offshore and international drilling markets, where new orders grew during the third quarter.
The Houston-based operator in its third quarter results reported that North American onshore customers are limiting spending, mirroring reports by other major oilfield services operators.
Denver-based Liberty Oilfield Services Inc., which provides completions services across North America’s onshore, saw headwinds begin to strengthen midway through the third quarter, with the usual year-end slowdown by customers beginning earlier than usual.
CEO Chris Wright and his team discussed the slowing demand for hydraulic fracturing (fracking) during a recent conference call.
“The slowing pace of frack activity in the second half of 2019 is leading to a further reduction of demand for frack fleets, resulting in pricing pressure on services,” Wright said. “We expect that the industry slowdown in fourth quarter completions may be more severe this year than it was last year as operators face capital constraints and manage completions to fixed capital expenditure budgets.”
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