Baker Hughes US Land Weekly Rig Count - Dec 18 2020

In the latest US Land Weekly Rig Count, the US Land Rig Count climbed 5 rigs to finish at 328 active rigs in US Land. The Permian added 6 rigs while the DJ Basin lost 1 rig. All of the Permian additions this week were in New Mexico, likely in response to potential drilling regulation changes on federal lands with the Biden administration

While a frac ban on federal lands will be a problem for the industry, the current oil price and company debt is a far more pressing issue. Most forecasts project that oil prices will stay between $40 and $50 for most of 2021, which is above breakeven for most plays. Unfortunately, running at breakeven doesn't include paying off debt, paying dividends and cash flowing new wells. Unless there is a major change in oil prices, we will see more consolidation and bankruptcies in 2021.

Figure 1: Baker Hughes US land Rig Count - Dec 18 2020

Table 1: US Land Weekly Rig Count by State - Dec 18 2020