Rig Count

Rig Count – September 2, 2016

This week before presenting the current rig count data we take a historical look at rig counts across two categories.

(1) The number of rigs drilling for oil vs. gas and

(2) number of rigs drilling vertical, directional and horizontal wellbores.

Rigs Drilling For Oil vs. Gas – 1987 to Current

You can see as represented below that in mid-2011 the number of rigs drilling for oil surpassed those drilling for natural gas.

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The precursor to this event was the change in oil prices versus nat gas prices. The United States is one of the few countries which has a balanced infrastructure and established market for both oil and natural gas. The the rest of the world markets have an inclination towards oil.  In the United States, oil and gas prices historically were correlated with a ratio of 6:1 meaning that a barrel of crude oil costs six-times as much as a Mcf of natural gas.

Although this correlation remains mainly positive from 2003 to 2014, it does turn negative in the third quarter of 2010 when the price of crude oil and natural gas moved in different directions with large magnitudes greater than historical norms.  This event dramatically changed the number of rigs drilling for oil vs gas to the point today where only 16% of the rigs are drilling for natural gas.

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Rigs Drilling Vertical, Directional, and Horizontal Wellbore Profiles – 1991 to Current

wellbore profiles X-Large

This Weeks Rig Count and Oil Price Update

October crude CLV6, +3.17% was at $44.35 a barrel on the New York Mercantile Exchange, up $1.19, or 2.8%, from Thursday’s settlement. It traded around $44.46 before the rig data.

The number of active U.S. rigs drilling for oil edged up by 1 to 407 rigs this week, marking the ninth increase in 10 weeks following a flat reading last week, according to a weekly count from energy services provider Baker Hughes.  The total active U.S. rig count, which includes oil and natural-gas rigs, rose by 8 to 497.  At this time last year, drillers were operating 662 oil rigs.

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 Review of State and Basin Rig Counts

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Oklahoma Rig Summary

Oklahoma added 4 rigs from last week.  The Stack play continues to dominate with the majority of rigs (46.9%) running in Blaine, Canadian, and Kingfisher Counties.

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Review By Basin

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All of the data used in this report is sourced from Baker Hughes (BHI)

 

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