The U.S. natural gas rig count climbed three units to 189 for the week ended Friday (Sept. 28) as a decline in oil drilling kept the overall domestic count steady, according to data from Baker Hughes, a GE Company (BHGE).
The United States ended the week with 1,054 total rigs, with the three natural gas rigs that returned to the patch offsetting the exit of three oil rigs. The addition of one “miscellaneous” rig helped tip the balance, leaving the domestic tally up one unit week/week and up 114 rigs from 940 running a year ago.
Three horizontal units were added to offset the loss of two vertical rigs. Land drilling saw a small net gain for the week as activity held steady in the Gulf of Mexico, which finished with 18 rigs (down from 22 a year ago).
Canada’s rig count, meanwhile, saw a sharp decrease for the second straight week, falling by 19 units (13 oil and six gas) to 178, down from 213 active rigs in the year-ago period. The combined North American rig count ended the week at 1,232 rigs, versus 1,153 rigs a year ago, according to BHGE.
Among plays, BHGE’s latest weekly report saw the prior week’s declines in the Cana Woodford quickly reverse, as the Oklahoma play picked up seven rigs to end at 67, beating its year-ago tally of 62. A detailed breakout of BHGE data by NGI’s Shale Daily shows the STACK (aka, the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties) picking up six rigs, and the SCOOP (South Central Oklahoma Oil Province) added one rig for the week.
Also among plays, the Haynesville Shale added two rigs to make it an even 50 (up from 44 a year ago), while the Denver Julesburg-Niobrara and Ardmore Woodford added a rig a piece.
The Permian Basin — the most active U.S. onshore play by far but also one dealing with some nasty basis differentials this shoulder season — saw two rigs pack up for the week, dropping its count to 486 (385 a year ago). The Granite Wash dropped one rig to finish flat year/year at 13.
Consistent with the gains in the Cana Woodford, Oklahoma led among states with a net increase of five rigs, while Alaska, Colorado, Louisiana and Utah added one rig each. Also among states, Texas, New Mexico and California each dropped two rigs for the week, while Wyoming saw one rig pack up shop.
The outlook is bright for the U.S. oil and gas producers, based on a survey about borrowing base redeterminations by Haynes and Boone LLP.
A survey of exploration and production (E&P) operators, oilfield services companies, energy lenders, private equity firms and other industry participants compiles predictions about the future borrowing capacity of E&Ps. Results from the fall and spring surveys have been compiled by Haynes and Boone since April 2015; the latest was done earlier in September.
More than 78% of the respondents expect E&P borrowing bases to increase, with 36%-plus forecasting an increase of at least 20%. The overall results strike a note of optimism “on par” with the firm’s spring 2018 survey, the law firm said.
Meanwhile, Hi-Crush Partners LP said earlier in the week it has temporarily shuttered dry sand plant operations at the Whitehall, WI, facility given “softness” in U.S. completions activity.
Whitehall’s wet sand plant remains operational, and Hi-Crush still is selling inventory from on-site storage to meet northern white customer demand for hydraulic fracture (frack) and completions activity.
“Our strategic decision to temporarily idle Whitehall’s dry plant was driven by recent, temporary softness in completions activity and frack sand demand,” said CFO Laura C. Fulton. “This reduced level of expected activity is reflected in our updated guidance for sales volumes of 2.8 to 3.0 million tons for the third quarter we previously communicated.”
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