baker hughes US

The U.S. natural gas rig count dropped one unit to finish at 71 for the week ended Friday (Sept. 11) amid generally modest changes to domestic drilling activity during the period, the latest figures from Baker Hughes Co. (BKR) show.

One oil-directed rig and one natural gas-directed rig exited the patch in the United States during the week, lowering the combined U.S. rig count to 254, 632 units behind the 886 rigs active at this time last year. 

Land drilling declined by two units, while the Gulf of Mexico (GOM) held steady at 15 rigs. The number of horizontal rigs fell sharply during the week, with six units packing up shop. That was partially offset by the addition of three vertical units and one directional rig, according to BKR.

The Canadian rig count finished unchanged at 52, down from 134 in the year-ago period. The combined North American tally ended the week at 306, versus 1,020 a year ago.

Canada rig count

Among major plays, the Marcellus saw the largest net decline, giving up two rigs to fall to 24, versus 50 a year ago. The Haynesville dropped one rig to end with 35 for the week, down from 50 in the year-ago period. 

Also among plays, the Permian Basin shed one rig week/week to finish with 124 active units.

Broken down by state, New Mexico and Texas each dropped one rig during the week, as did West Virginia. Oklahoma added one rig overall, finishing with 12 units, versus 76 a year ago.

According to the U.S. Energy Information Administration (EIA), domestic oil output is forecast to rise to 11.2 million b/d this month as production in the GOM returns following Hurricane Laura.

“However, after September, EIA expects U.S. crude oil production to decline slightly, averaging just under 11.0 million b/d during the first half of 2021 because…new drilling activity will not generate enough production to offset declines from existing wells.

“…On an annual average basis,” researchers said, “EIA expects U.S. crude oil production to fall from an average of 12.2 million b/d in 2019 to 11.4 million b/d in 2020 and 11.1 million b/d in 2021.”

Meanwhile, the U.S. OFS industry through August had lost more than 100,000 jobs since the coronavirus pandemic began eating away at oil and gas demand, according to the Petroleum Equipment & Services Association

“While the worst of the cutbacks appear to be behind the industry, considerable uncertainty about the future remains because a surge in Covid-19 cases could derail the economic recovery and suppress demand,” researchers noted.