Baker Hughes US Land Weekly Rig Data - Sept 10 2021

This week, the Baker Hughes Weekly US Land Rig Count was up 2 rigs to finish at 497 active rigs. The Permian added 4 rigs while the Northeast lost 2 rigs and the Eagle Ford lost 1 rig.  

This week, the EIA released it's latest Drilled but Uncompleted (DUC) information. Figure 2 shows EIA DUC data from 2013 to July 2021. The EIA DUC calculation has a significant lag because they use public sources (FracFocus) and state reports. Most operators usually report within 3 months to these agencies and the EIA reports with a 3 month lag. The EIA usually doesn't publish their information until most of the operator data is in the system

Unsurprisingly, there has been a significant drawdown in the DUC count since the beginning of the year. Rig Count has not rebounded to previous levels and resulting in fewer new wells to be added to the DUC count. Operators completed their backlog of DUCs while slowly increasing rig count. They have maintained oil production levels while mainly completing DUCs and a few new wells.

The nature of the US oil industry is that there will always be a number of DUCs in the system. The generally accepted number for balanced DUCs versus new drilling is between 5000 and 6000 DUCs. Above 6000 DUCs and the rigs are out drilling the frac fleets. Under 5000 DUCs, and the frac fleets are completing more wells than are being drilled. Based on the latest data, rig count needs to increase or the number of active frac fleets will probably be reduced. 

Figure 1: Baker Hughes Weekly US Land Rig Count - Sept 10 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by State - Sept 10 2021
(Source: Baker Hughes) 

EIA Regional DUC Information by Region - Sept 2021
(Source: EIA)

Baker Hughes US Land Weekly Rig Report - August 27 2021

This week, the Baker Hughes US Land Rig Count increased by 5 rigs this week to finish at 490 active rigs. The Permian added 2 rigs, the Powder River Basin added 2 rigs and the MidCon added 1 rig.

After plateauing earlier in the summer, the US Land rig count has had a slow and steady crime over the last 12 weeks. Thee Permian Basin seen a flat rig count through earlier June and July but has increased steadily over the last 7 weeks. While most forecasts show flat or slow growth through 2022, the recent growth in rig count is very positive indication.

Figure 1: Baker Hughes US Land Rig Report - August 27 2021 
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Report by State - August 27 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - August 20 2021

This week the Baker Hughes US Land Weekly Rig Report increased 1 rig to finish at 485 active rigs. The Permian added 2 rigs and the Rockies Other (Utah) added 1 rig, while the ArkLaTex and Eagle Ford region each lost 1 rig. 

Over the last 7 weeks, the ArkLaTex rig count has decreased from a high of 54 rigs down to 47 rigs. Even though gas price has increased significantly over the last couple of months, this region that is dominated by gas drilling has seen a decrease in rig count. The Baker Rig Count does not show the detail of individual operators and this decrease could be the result of consolidation in the region.

Figure 1: Baker Hughes US Land Weekly Rig Count - August 21 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by State - August 21 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - August 13 2021

This week the Baker Hughes US Land Rig Report increased 8 rigs to finish at 484 active rigs. The Bakken added 4 rigs, Eagle Ford added 3 rigs, the Permian added 2 rigs and the West Coast added 1 rig. The ArkLaTex region lost 2 rigs this week. 

Oil prices were down this week in response to speculation of decreased demand due to increased Covid cases. While nation wide lockdowns appear unlikely, personal responsibility may result in less travel and work from home. Covid cases will continue to rise over the next several weeks as schools restart and uncertainty about Covid response continues.

Baker Hughes US Land Weekly Rig Report - August 13 2021
(Source: Baker Hughes)

Baker Hughes US Land Rig Report by State - August 13 2021
(Source: Baker Hughes)

Baker Hughes Weekly US Land Rig Report - August 6 2021

This week, the Baker Hughes Weekly US Land Rig Report increased by 7 rigs this week to finish at 473 active rigs. The Permian added 4 rigs, MidCon added 3 rigs, Rockies Other (Utah) added 2 rigs and the ArkLaTex lost 2 rigs.

Operators and service companies have been announcing their 2nd quarter results over the last couple of weeks. Most of the operators have shown considerable profits and are focused on paying down debt and/or returning profits to investors. The service companies results have improved but do not match the results of the operators. Service companies continue to fight for market share at the cost of profit while operators benefit from low prices. As service companies consolidate and reduce the number of choices in the market place, they will stop fighting each other for market share and generate a profit that can be spent on CapEx, debt or investors.

Figure 1: Baker Hughes Weekly US Land Rig Report - August 6 2021
(Source: Baker Hughes)

Table 1: Baker Hughes Weekly US Land Rig Report by State - August 6 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - July 23 2021

This week, the Baker Hughes US Land Rig Count increased by 7 rigs to finish at 473 active rigs. The Permian added 4 rigs, the MidCon added 3 rigs, the Rockies Other (Non shale plays) added 2 rigs while the ArkLaTex region lost 2 rigs.

With gas prices approaching three year highs and oil prices above $70, US producers continue to show restraint on increasing drilling activity. The publicly traded companies remain focused on reducing debt and showing/returning profits to investors. Even with the reduced drilling activity, US Oil production continues to remain above 11 MMBOPD. This is mainly due to the increased efficiencies in drilling and completions. A recent Rystad Energy presentation showed a horizontal rig count of between 320 and 330 rigs was required to maintain current US production. This is down significantly from required rig count of more than 800 rigs through 2018 and 2019. 

Figure 1: Baker Hughes US Land Weekly Rig Count - July 23 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by State - July 23 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - July 16 2021

This week, the Baker Hughes US Land Weekly Rig Count increased by 5 rigs to finish at 466 active rigs. The Powder River Basin added 3 rigs and the Permian and MidCon each added 1 rig. The ArkLaTex region lost 1 rig in the last week.

In the past week, the members of OPEC came to a production agreement for the rest of the year, slightly increasing production. There were concerns that the OPEC members wouldn't come to an agreement which could result in unconstrained production. This agreement has increased production rates but kept a lid on total production. Oil prices have dropped in the last week due to this agreement. Since US producers continue to exercise restraint on production increases, OPEC decisions will have the largest impact on oil prices in the short term.

Figure 1: Baker Hughes US Land Weekly Rig Count - July 16 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by State - July 21 2021
(Source: Baker Hughes)