RS Energy Group (RSEG), with almost 20 years of history, has expertise in dissecting the oil and gas market and delivers technical, basin-specific-geological and financial insights. During 2016 RSEG acquired NavPort, a leading permit, completion and production data company. NavPort’s high-powered data leverages its industry roots, born from a proppant company, to provide valuable information on completion techniques, proppant intensities, frac job types and well-level production allocation. As the last completion reports for November and December continue to roll in, the industry is ready to show that it has learned from the past 18 months as higher oil prices start to fuel optimism going into 2017.
What We Saw in 2016
After six quarters of declining rig counts and eight quarters of declining completions, the North American oil and gas drilling market finally leveled in 2016 despite a rollercoaster ride in activity. Although the number of active rigs dropped by almost 50% in May 2016 compared to January, the count in December returned to same level as the start of the year – about 840 active rigs. Completion counts were just above 1,000 in January 2016, 56% lower than one year earlier, and they continued to decline through April to a low of 700. This four-month 30% decline was followed by four months of increasing completions, spiking almost 37% through August. September and October each recorded about 850 completions; as some operators continue to report completions for the end of the year, we do not currently have the final numbers for November and December.
There were two notable areas of increasing activity by rig and completion counts in 2016, the Permian and Anadarko basins. Active rig counts in the Anadarko Basin bottomed in June and increased 53% by the end of December. The fleet tally in the Permian reached a low point a month earlier, in May, and jumped 85% through December.
This dramatic uptick in Permian drilling drives the rest of this report, which zeroes in on reported production, forecast production, the most prominent and active operators and their market share, and key operator breakeven points by Permian sub-basin.
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