U.S. Rig Count Falls As Both Oil And Gas Drilling Deteriorate

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI – Analyst Report) reported a fall in the U.S. rig count (number of rigs searching for oil and gas in the country) from the previous week. The decline stemmed from a lower number of oil and gas-directed rigs. The West Texas Intermediate (WTI) oil futures are currently trading at around $49 per barrel.

Analysis of the Data

Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 795 for the week ended Oct 9, 2015. This was down by 14 from the previous week’s rig count. This level is the lowest since 2003.

The current nationwide rig count is still less than half the prior-year level of 1,930. The count rose to a 22-year high in 2008, peaking at 2,031 in the weeks ended Aug 29 and Sep 12.

Rigs engaged in land operations were down by 16 from the previous week at 760. Inland water activity was flat at 3 rigs while offshore drilling was up by 2 to 32 units.

Natural Gas Rig Count: The count fell by 6 to 189. As per the most recent report, the number of natural gas-directed rigs is down almost three-fourth from its recent peak of 811 reached in 2012. In fact, the current natural gas rig count is almost 80% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 320 active natural gas rigs.

Oil Rig Count: The count, which rocketed to the highest figure of 1,609 in Oct 2014 since Baker Hughes started breaking up oil and natural gas rig counts in 1987, fell by 9 to 605. The current tally is still on the low end of the almost five-year range and well below the previous year’s rig count of 1,609.

Rig Count by Type: The number of vertical drilling rigs fell by 3 to 114, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was down by 11 to 681.

Gulf of Mexico (GoM): The GoM rig count was up by 2 to 31 units.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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