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)

Baker Hughes US Land Weekly Rig Report - July 2 2021

This week, the Baker Hughes US Land Rig Count increased by 5 rigs to finish at 459 active rigs. The DJ Basin added 2 rigs while the Bakken, Permian and Northeast each added 1 rig.

After their long slumber, the Bakken and the DJ Basin have both added rigs in the last couple of weeks. While this increase in activity isn't close to a return to normal, it's nice to see some activity return to the area. Figure 2 shows the Bakken and DJ Rig Count from 2018 to today. The DJ Basin reached a high of 32 rigs in early 2019 while the Bakken averaged nearly 55 rigs from mid-2018 to late 2019. With consolidation in the DJ and reduced Tier 1 acreage in the Bakken, there should be not expectation that we will return to these levels.

Figure 1: Baker Hughes US Land Weekly Rig Count - July 2 2021
(Source: Baker Hughes)

Table 1: Baker Hughes Weekly US Land Rig Count by State - July 2 2021
(Source: Baker Hughes)

Figure 2: Bakken and DJ Basin Rig Count since 2018
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - June 25 2021

This week the Baker Hughes US Land Rig Report was down 2 rigs to finish at 454 active rigs. The Permian and the MidCon each lost 1 rig while the other basins remained flat. 

In a recent Rystad Energy webinar, they discussed the rig count required to maintain and grow US oil production. Based on their research, the efficiency gains throughout the industry has significantly lowered the horizontal rig count required to maintain the current US Oil production. Their data shows that between 320 and 330 horizontal rigs should be enough to maintain US oil production between 11.0 and 11.5 million BOPD. Their estimate of the current US Land horizontal rig count is 325 rigs, just enough to maintain flat oil production. Additional rig increases in oil regions should result in increased US Oil production.

Figure 1: Baker Hughes US Land Weekly Rig Count - June 25 2021
(Source: Baker Hughes)

Table 1: Baker Hughes Weekly US Land Rig Count by State - June 25 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Count - June 18 2021

This week, the Baker Hughes US Land Weekly Rig count was up 9 rigs to finish at 456 active rigs. The DJ Basin added 3 rigs while the Permian, Bakken, West Coast and Powder River Basin each added 1 rig. 

Both oil and gas prices continue to climb, with oil averaging above $70 last week and gas averaging above $3. The last time both oil and gas were above these benchmarks was November 2018. Historically, these commodity prices would spur a rapid increase in drilling in the US. While we see an increase in rig activity, the response is depressed compared to the past as operators focus on fixing their balance sheets rather growing production. We will likely see record cash flows from operators at the end of the year due to higher commodity prices. If prices remain at this level through 2021, we should expect increased activity in 2022 as well.

Figure 1: Baker Hughes US Land Weekly Rig Count - June 18 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Count by State - June 18 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Count - June 11 2021

This week, the Baker Hughes Weekly US Land rig count increase 5 rigs this week to 447 active rigs. The Permian increased 4 rigs, the Powder River Basin added 3 rigs and the ArkLaTex region increased by 1 rig. The Northeast lost 2 rigs this week and Indiana lost 1 rig.

Figure 1: Baker Hughes US Land Weekly Rig Count - June 11 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by State - June 11 2021
(Source: Baker Hughes)

Baker Hughes Weekly US Land Rig Count - June 4 2021

This week, the Baker Hughes US Land Rig Count was flat week on week, to finish at 442 active rigs. The Permian lost 1 rig and the ArkLaTex added 1 rig. 

Oil prices continue to climb, reaching their highest level since the summer of 2018. In the summer of 2018, oil prices were near $70 and the rig count was between 1100 and 1200 rigs. US oil production grew rapidly during this time, which is part of the reason oil prices dropped toward the end of 2018 and into 2019. In 2018, US Daily oil production was near 10.9 million BOPD and grew to 12.9 million BOPD. The US has maintained 10.9 million BOPD in 2021 due to completion of DUCs rather than drilling wells. With the current low rig count and depletion of DUCs, US oil production will decline without a change in rig count.

Figure 1:Baker Hughes Weekly US Land Rig Count - June 4 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count - June 4 2021
(Source: Baker Hughes)

Figure 2: US Oil Production - June 4 2021
(Source: EIA)

Baker Hughes US Land Weekly Rig Report - May 28 2021

This week, the Baker Hughes US Land Rig Count was up 2 rigs to finish at 442 active rigs. The Permian and the MidCon each added 2 rigs, and the Eagle Ford added 1 rig. The Northeast lost 2 rigs and the DJ dropped 1 rig.

Figure 1: Baker Hughes US Land Weekly Rig Count - May 28 2021
(Source Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count - May 28 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - May 21 2021

This week, the Baker Hughes Rig count was up 3 rigs to finish to 440 active rigs for the week. The MidCon added 4 rigs while the ArkLaTex region lost 1 rig.

While the rig count increased again this week, the rig count in most areas remained flat. The Permian rig count has been flat for the last 7 weeks, only increasing by 7 rigs since April 1st. Based on the information from the earnings reports and the field, the majors are locked in to return profits to customers and paying off debt. The independent producers have increased rig count quickly but may have reached their capacity for new activity. I expect the rig count should reach a plateau over the summer and then increasing again toward the end of the year.

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

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

 

Baker Hughes US Land Rig Count - May 14 2021

This week, the Baker Hughes US Land Rig Count was up 3 rigs to finish at 434 active rigs. The Permian added 2 rigs and the Bakken and MidCon each added 1 rig. The ArkLaTex region dropped 2 rigs this week.

We continue to see mergers happen between companies in all basins, capturing the efficiency and leverage of large acreage positions. In smaller basins like the DJ and the Marcellus, there could be 3 or 4 major players in the basin. This lack of diversity could have an impact on the number of available service companies in the area. Large operators tend to use larger service companies, capable of supplying multiple services under one name. 

Figure 1: Baker Hughes Weekly US Land Rig Count - May 14 2021
(Source: Baker Hughes)

Table 1: Baker Hughes Weekly US Land Rig Count by State - May 14 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - April 30 2021

For the third week in a row, the Baker Hughes US Land Rig Count was flat at 426 active rigs. There were some changes in the regional rig count with the Permian losing 2 rigs and the ArkLaTex region losing 1 rig. The Eagle Ford gained 1 rig and the Texas Gulf Coast gained 2 rigs.

The Permian rig count peaked 3 weeks ago at 227 rigs and has fallen 3 rigs to 224 rigs this week. The Permian has been the driving force in the rig recovery, driven mostly by the independents. The majors are stockpiling cash to pay off debt and return money to investors. This may be a plateau in the rig count if the independents have reached their maximum rig count and the majors wait to improve their balance sheets before increasing rigs.

Figure 1: Baker Hughes US Land Weekly Rig Count - April 30 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Weekly Rig Count by Region - April 303 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Count - April 23 2021

This the Baker Hughes US Land Rig Count was the same as last week to finish at 426 active rigs. The Permian lost 1 rig (two losses in Texas and one addition in New Mexico) and the Southeast added 1 rig in Mississippi.

While rig count may be flat this week, there are no indications that rig count is going to stop increasing. The private operators are driving the increases in rig count. While publicly traded companies are focused on reducing debt and returning profits to shareholders, private companies are working on increasing production rates in order to take advantage of higher oil prices. 

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

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

Baker Hughes US Land Weekly Rig Report - April 16 2021

This week, the Baker Hughes US Land Weekly Rig Count increased by 5 rigs to finish at 426 active rigs. The Permian added 3 rigs, the Midcon added 2 rigs and the Bakken added 1 rig. The Northeast lost 1 rig this week.

In a recent World Oil article (click here for the article), they stated that the glut of oil stockpiled during the pandemic was nearly gone. I haven't seen many discussions about this issue recently and this paves the way for increased oil prices for producers. OPEC+ will continue to control the amount of oil that can be brought into the market. The US market is unable to respond until the industry covers financially.

The article also discusses that consumers are beginning to feel the prices at the pumps. I have personally heard people complain about high prices and are eager to blame politicians. This is another example of how the majority of the population doesn't understand the oil industry. Historically low gasoline prices means that record numbers of oil and gas employees are laid off. The US industry was demolished during the pandemic and needs higher prices to survive, grow production and explore for new oil. Without exploration and production growth, a true oil shortage will appear and the spike oil prices will have a real impact on everyone. 

Figure 1: Baker Hughes US Land Weekly Rig Report - April 16 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Report by Area - April 16 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - April 9 2021

This week, the Baker Hughes US Land Weekly Rig Report increased by 5 rigs to finish at 421 active rigs. The ArkLaTex added 2 rigs, the Northeast and MidCon both added 1 rig. Two rigs were added in Utah and one rig was lost in the Powder River Basin.

There have been multiple reports over the last couple of weeks that the DUC count continues to drop. The current rig count will not be enough to build DUCs or increase oil production. I saw report this week that US Production will drop in 2021 compared to previous years. This drop will be made up by OPEC+ as demand returns. While the rig count continues to move in the right direction, it will take some time for US Oil production to reach a plateau.

Figure 1: Baker Hughes US Land Weekly Rig Count - April 9 2021

Table 1: Baker Hughes US Land Weekly Rig Count - April 9 2021

Baker Hughes US Land Weekly Rig Count - March 26 2021

The US Land Rig Count continues to climb as the Baker Hughes Rig Count showed 405 active rigs this week, up 7 rigs from last week. The Permian added 5 rigs while the Bakken added one rig and the Rockies added one rig.

Since the spike in gas prices due to the winter storm in February, gas prices have continued to fall, matching pricing that was seen in early January 2021 and October 2020. With winter behind us (hopefully) gas prices will continue to fall as the seasonal demand drops and the focus turns to refilling gas storage. 

Baker Hughes US Land Weekly Rig Count - March 26 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Count by State - March 26, 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - Mar 5 2021

This week, the Baker Hughes US Land Rig report rose 4 rigs to finish at 389 active rigs. The Permian gained 3 rigs and the ArkLaTex and MidCon each gained 1 rig. The Bakken lost 1 rig this week.

After a crazy week of cold weather and very high gas prices, gas prices returned to their normal level below $3/mcf. Oil prices increased this week as OPEC+ announced that they would not be increasing production, which was a surprise to nearly everyone. This should help the industry continue to work through surplus oil that's in the market and maintain prices for profitable drilling. I don't expect a large increase in US based rigs as the capital still is not available for increased drilling programs.

Figure 1: Baker Hughes US Land Rig Count - Mar 5 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Count by State - Mar 5 2021
(Source: Baker Hughes)

Baker Hughes Weekly US Land Rig Report - Feb 12 2021

This week, the Baker Hughes US land Rig Count increased 4 rigs to reach 379 active rigs in US Land. The Permian added 5 rigs and the Bakken and the Eagle Ford each added 1 rig. The MidContinent region lost 2 rigs and the ArkLaTex lost one rig. 

We should expect rig count to climb in the short term as oil prices continue to climb. Recent oil price forecasts have been revised upward as demand continues to increase and the supply glut continues to shrink. Through 2021, US operators will complete outstanding DUCs and increase rig count in order to maintain production levels.

Figure 1: Baker Hughes US Land Rig Count - Feb 12 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Count by State - Feb 12 2021
(Source: Baker Hughes)

Baker Hughes US Land Rig Count - Jan 29 2021

This week, the Baker Hughes US Land Rig Count was up 6 rigs to finish at 365 active rigs. The Permian was up 4 rigs while the MidCon and Bakken each added 1 rig.

US Land Rig Count has been on a very steady incline for the last 12 weeks. It's not clear what the peak will be for rig count but in order to maintain a flat production rate for the US, the rig count will probably have to reach 600 rigs. I don't think we will get there this year and the current DUC count will help maintain production rates in the near term. The rig count at the end of 2021 will have a large impact in production in 2022.

Figure 1: Baker Hughes US Land Rig Count - Jan 29 2021
(Source: Baker Hughes)

Table 1: Baker Hughes US Land Rig Count by State - Jan 29 2021
(Source: Baker Hughes)

Baker Hughes US Land Weekly Rig Report - Jan 22 2021

This week, the Baker Hughes US Land Rig Count increased 5 rigs to finish at 359 active rigs. The ArkLaTex, MidCon, Northeast and Bakken each added 1 rig while the Permian lost 1 rig. Alaska added 2 rigs this week as winter operations increased.

While the cancelation of the Keystone Pipeline permit is devastating to the pipeline workers, it should have a very limit impact on US Land oil and gas operations. The Keystone Pipeline was intended to bring heavy crude from Western Canada to refineries on the Gulf Coast. The refineries will continue to get supplies from existing pipelines, rail shipments or from international destinations.

Figure 1 -  Baker Hughes US Land Rig Count - Jan 22 2021
(Source: Baker Hughes)

Table 1 -  Baker Hughes US Land Rig Count by State - Jan 22 2021
(Source: Baker Hughes)