The United States added 10 rigs to its active fleet in the latest Baker Hughes rig count. That’s a switch from the week-ago count when a handful of rigs left the hunt. To the north, Canada gave up rigs, another flip from the previous week’s count.
Six oil-directed rigs were added in the United States, and four gas-directed rigs joined the hunt in the count released on Friday (Aug. 7). Eight of the additions were horizontal rigs; three were verticals; and one directional rig was lost.
Canada dropped a net of seven in the latest count after adding 15 in the previous week’s tally (see Daily GPI, July 31). Canada lost 12 oil-directed rigs but added five gas rigs. It all made for a net North America gain of three rigs.
In the United States, Texas was the biggest gainer, adding eight rigs, thanks largely to the Permian Basin, which saw its census climb by six. The next biggest gainer was Louisiana to the east, which added four rigs, one of them a Haynesville rig. The biggest losing state was Pennsylvania, which saw the net retreat of three rigs.
Aside from the conventional-unconventional Permian, week-to-week changes among unconventional plays were modest in the latest count, according to Baker Hughes and NGI’s Shale Daily.
On Friday the U.S. count stood at 884, which is down 54% from the year-ago tally of 1,908. Canada’s total count stood at 208, down 46% from its year-ago tally. The Alberta count is down by 50%, while British Columbia is down 24%, Saskatchewan is off 45% and Manitoba is off 60% from year-ago levels.
That’s a lot fewer rigs than a year ago, but still too many to lift prices to where producers would like them. Looking ahead to next year, analysts at Barclays Commodities Research said in a recent note that in 2016, natural gas production will still be growing, “albeit at a slower pace.
“We forecast y/y production growth of 1.7 Bcf/d in 2016,” the firm said. “This represents a slowdown compared with the past two years in which production growth has averaged about 3 Bcf/d. Northeast production should continue to grow in 2016 by 2.3 Bcf/d, but this will be somewhat negated by a year-on-year decline in associated gas production elsewhere. A 5% surprise to the upside in Texas and North Dakota would quickly push end October 2016 storage levels above the 4 Tcf level.”
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