Baker Hughes US Land Weekly Rig Count and EIA DUC Data

The Baker Hughes US Land Weekly Rig Count showed that there were 306 active rigs in the US, up 10 rigs from the previous week. The Permian added 5 rigs, while the Eagle Ford and West Coast each added 2 rigs. The DJ Basin added 1 rig this week. 

While rig count continues to increase, the current drilling activity is insufficient to maintain current US porduction levels. I have heard several different forecasts, but we likely need more than 600 active horizontal rigs in order to maintain the US production rate at or above 10 million BOPD. Until rig counts increase, operators have been completing DUCs to meet their production goals.

Figure 2 shows the monthly DUC data from the EIA. There are many opinions that the EIA DUC data is flawed and I tend to agree with them. I also believe that all DUC data is flawed because it is so difficult to measure what is a DUC versus what is a normal inventory well. Regardless, the EIA data shows that the DUC count has been decreasing for several months. We should expect that the DUC count will continue to fall until drilling activity increases. If drilling activity doesn't increase by the end of 2021, the majority of the DUCs will be completed by that time.

Figure 1: Baker Hugghes US Land Weekly Rig Count - Nov 27 2020
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Data - Nov 27 2020
(Source: Baker Hughes)

Figure 2: EIA Monthly DUC Data
(Source: EIA)

Baker Hughes Weekly US Land Rig Count - Nov 20 2020

This week, the Baker Hughes US Land Weekly Rig Counmt decreased by 1 rig to setlle 296 active rigs. The Permian added 2 rigs and the ArkLaTex added 2 rigs, while the Eagle Ford, MidCon, Powder and Bakken each lost 1 rig.

Rig count appears to be stablizing with no signs of decreasing signficantly. There are plenty of signs and discussion that completions are slowing. This is probably temporay until budgets resent in January. There should be concern that a prolonged second wave of COVID cases could have an impact on demand. So far that hasn't happen yet.

Figure 1: Baker Highes US Land Weekly Rig Count - Nov 20 2020
(Source: Baker Hughes)

Table 1: Baker Highes US Land Weekly Rig Count - Nov 20 2020
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - Nov 13 2020

The Baker Hughes US Land Rig Count was up 11 rigs to 297 active rigs rigs. The Permian gained 7 rigs while the ArkLaTex, Midcon, Eagle Ford and Northeast eached gained 1 rig. For the first time in a while, there weren't any losses of rigs in any regions.

Oil prices continue to remain around the $40 range for both WTI and Brent. In the past week, OPEC+ has agreed to extend current productiom cuts and may attempt to keep production at current levels for the next 3 to 6 months. Even with those cuts, the market will remain balanced or slightly oversupplied. It remains to be seen what happens to oil demand as a second wave of COVID cases continues to increase throughout the world

Figure 1: Baker Hughes US Land Rig Count - Nov 13 2020
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Count - Nov 13 2020
(Source: Baker Hughes)

Baker Huighes Weekly Rig Report - Nov 6 2020

This week the Baker Hughes Rig Count was up 4 rigs to 286 active rigs in US Land. The Permian saw an increase of 5 rigs, the Eagle Ford increased by 3 rigs and the ArkLaTex increased by 1 rig. The Northeast lost 2 rgis and the MidCon dropped 1 rig. 

The rig count continues to climb as oil prices have stabilized and operators look to maintian production volumes. There are indications coming from the field that completions are beginning to slow down for the end of the year. I expect that rig count will be maintained as operator build DUCs for completion programs in 2021.

Figure 1: Baker Hughes Weekly Rig Report - Nov 6 2020

Table 1: Baker Hughes Weekly Rig Report - Nov 6 2020

Baker Hughes Weekly Rig Report - Oct 30 2020

The rig count recovery continues this week, with the Baker Hughes Rig Count showing an increase of 9 rigs to 282 active rigs in US Land. The Permian Basin added 9 rigs, the Eagle Ford added 1 rig and the MidCon lost one rig. 

With all of the mergers happening in recent weeks, it remains to be seen if this result in an increase or decrease in acitivty. Most operators have stated that they will attempt to maintain flat production in 2021. This should result in an increase in rigs through 2021 but the finalk total will be difficult to determine. The impact of COVID through the fall and winter is a huge unknown right now.

Figure 1: Baker Hughes Weekly Rig Count - Oct 30 2020
(Source: Baker Hughes)

Table 1: Baker Hughes Weekly Rig Count - Oct 30 2020
(Source: Baker Hughes)