Energize Weekly, September 11, 2019
The number of oil and gas rigs operating in the U.S. – on land and offshore – fell in September to less than 900 for the first time since 2017, according to the Baker Hughes North American Rig Count.
There were 898 rigs operating on Sept. 6 the weekly survey, by the Houston-based oilfield services company, found with 870 land rigs and 28 offshore rigs.
The count had fallen by six from the previous week with 738 rigs drilling for oil and the remainder drilling for natural gas.
Almost 90 percent of the rigs were drilling horizontal wells, which are used in both natural gas and oil shale plays.
Drillers, particularly shale drillers, have been under pressure to trim operations and curtail red ink. In the first quarter of 2019, just 10 percent of the top 40 domestic shale operators had positive cash flow, according to industry analyst Rystad Energy.
The number of companies with positive cash flow rose to 35 percent at the end of the second quarter thanks to more efficient operations and higher oil prices. Prices have dropped from an April peak of $66 a barrel for West Texas Intermediate crude to $56.52 a barrel on Sept. 6.
A few states posted modest increases in rigs. In New Mexico, they were up to 108 from 100 a year earlier. In North Dakota, the count increased by one to 54, and Louisiana was up two to 60. California, Utah and Wyoming all had small increases in operation rigs.
Those gains were, however, offset by sharp declines in some states and basins. Texas continued to have the largest number of rigs running in the county, 438, but that was a 17 percent drop when compared with the number of rigs operating in September 2018.
Oklahoma reported the sharpest drop with the rig count over the last 12 months falling 45 percent to 75. In Colorado, rigs were down by three to 27.
In the Marcellus Shale, a predominantly natural gas play, rigs were down 20 percent in Pennsylvania to 34, and in Ohio, the count was down 43 percent to 12 rigs.
