Coming off a large gain in the oil patch a week earlier, the domestic drilling count reversed course during the week ended Friday driven by a pullback in the Permian Basin, according to the latest numbers from Baker Hughes Co. (BKR).
The U.S. rig count fell eight units to 805 for the week; the decline was entirely attributable to a drop in oil-directed rigs, as the number of natural gas rigs held steady week/week at 125. That’s a sharp contrast to the previous week, when BKR tallied an 18-rig increase in the domestic oil patch.
The Gulf of Mexico dropped one rig week/week to 23, down slightly from 24 rigs in the year-ago period. Seven vertical rigs and three horizontal rigs departed during the week in the United States, partially offset by the addition of two directional rigs, according to BKR.
Meanwhile, the Canadian rig count plunged 50 units, 36 oil and 14 gas, to fall to 99 for the week, mirroring a similarly large drop-off recorded in late 2018. The Canadian count ended the week 29 units ahead of its year-ago total of 70.
The combined North American rig count finished at 904 for the week, down sharply from 1,153 rigs active at this time last year.
Among major plays, the Permian saw the largest week/week decline, dropping nine units to 405. That’s down from 486 in the year-ago period. The Cana Woodford saw two rigs exit for the week, while the Barnett and Haynesville shales each dropped one rig.
Also among plays, the Marcellus Shale picked up one rig to increase its total to 41, versus 57 a year ago. The Williston Basin added one rig to up its total to 52, off slightly from 56 a year ago.
Among states, Texas, home to a large chunk of the Permian, suffered the largest weekly loss, with 14 rigs departing. Meanwhile, New Mexico added two rigs for the week. Alaska, North Dakota, Oklahoma, Pennsylvania and Wyoming each added one rig.
Energy sector activity across Texas, parts of New Mexico and Louisiana dipped again in the final three months of the year, driven mostly by a downturn in support services, according to a quarterly survey by the Federal Reserve Bank of Dallas.
“Survey responses pointed to a modest decline in overall activity levels in the oil and gas sector,” said the Dallas Fed’s Michael Plante, senior research economist. “This was largely driven by oilfield support service firms, which reported falling equipment utilization, operating margins and employment since the last quarter.”
The broadest measure of conditions facing Eleventh District energy firms, the business activity index, remained in negative territory in 4Q2019. Still, the index eased from minus 7.4 in the third quarter to minus 4.2 in the final three months, suggesting that the pace of contraction overall has declined.
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