Exploration & Production - Rig Counts
Total U.S. rig count down 12 rigs from last week to 502total U.S. rig count down 12 rigs from last week to 502.
It was another tough week for rig counts in North America. In the U.S., the total number of rigs dropped by 27 the week of Feb. 15, down to 514 rigs, according to data provided by Baker Hughes. Oil rigs fell by 26 to 413, and gas rigs lost one, falling to 101.
Simmons & Co. International analysts are predicting that U.S. natural gas production will fall by 600 million cubic feet per day (MMcf/d) or by 1% in 2016, the first such decline since 2005.
The EIA predicts a drop of 116,000 barrel per day in Lower 48 production, with most of the lost volumes coming from the Eagle Ford. The Permian Basin’s production will increase.
Halcón’s Steve Herod said that lowering drilling and completions costs is essential for E&P survival. Herod said the company Halcón has lowered wells costs to $6.75 million from $9.5 million in 2014.
Potential buyers have had to cut employees, and so far few companies are going out of their way to aggressively buy frack fleets or other equipment.
Oil exports are needed, but improbable, as U.S. oil supply builds. Near the end of March, storage at Cushing, Okla., had grown to 58.9 million barrels, about 80% of capacity.
U.S. crude oil in storage grew by 8.4 million barrels—twice as much as commodity analysts expected—to 1.125 billion barrels for the week ending Feb. 20, according to the EIA’s weekly report Wednesday. Of that, 434 million was in non-SPR storage, up from 363 million a year ago.
Halcón’s budget will fall 60% from 2014 levels while Sanchez reduces rigs.
The number of rigs in the Permian and the Bakken was analyzed.
Bakken share gains should reverse as drilling stagnates, activity in other basins expands.
As operators drill wells more quickly they are meeting program goals with fewer rigs.