U.S. RIGS DOWN 67
The US drilling rig count plunged 67 units—64 on land and 56 targeting oil—to settle at 1,125 rigs working during the week ended Mar. 13, according to data from Baker Hughes Inc.
That total is the lowest since Nov. 20, 2009, and 684 fewer units compared with this week a year ago. The count has now fallen in 14 consecutive weeks, losing 795 units during that time.
An Oppenheimer analyst this week said he expects the current cycle to follow patterns of the prior two drilling slumps in 2001 and 2008, resulting in a June trough of about 900 rigs, down 53% from the peak in September 2014.
Analysts with Cowen & Co., meanwhile, predict drilling will bottom out at 950-1,000 units by early third quarter, and recovery could begin by the fourth quarter, lifting the rig count by perhaps 150 units.
This week's overall declines
Lands rigs now total 1,069. Offshore rigs fell 3 units to 48. Rigs drilling in inland waters were unchanged at 8.
Oil rigs now total 866, down 709 units since Dec. 5 and 595 units year-over-year. Gas rigs shed 11 units to 257. Rigs considered unclassified were unchanged at 2.
Rigs engaged in horizontal drilling plunged 46 units to 849. Since Nov. 21, 523 horizontal units have gone offline. Rigs drilling directionally, meanwhile, shed 10 units to 110.
Canada managed to outdo its southerly neighbor in losses, plunging 80 units to 220, down 302 units year-over-year. Oil rigs plunged 65 units to 85 while gas rigs fell 15 units to 135.
Texas bearing the brunt
In the major oil- and gas-producing states, Texas's rig count yet again took a major dive, losing 37 units to 501—the state's lowest total since Jan. 8 2010. Since Nov. 21, Texas has lost 405 units, and since this time last year, the state has lost 367 units.
The Permian led the major US basins with a 22-unit decline for the second consecutive week to 311, down 203 units year-over-year. Production from the Permian in April is still expected to increase 21,000 b/d to nearly 2 million b/d, according to Energy Information Administration projections.
Production from the Eagle Ford, whose rig count has fallen 78 units in the past year, is expected to fall 10,000 b/d to 1.7 million b/d during April.
The Lone Star State in particular has felt the losses in its rig count over the past few months. The most recent Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Energy Producers (TAEP), fell 7 points due to low crude oil prices, a falling rig count, and decline in drilling permits.
Karr Ingham, economist and creator of TPI, said economic contraction gripping Texas oil and gas exploration and development is still in its early stages, and "dramatic contraction" in employment is under way.
Other major states, basins
Neighboring Louisiana, meanwhile, placed a distant second in losses, dropping 7 units to 93. That reflects a 4-unit drop in the Haynesville to 34. Oklahoma fell 5 units to 134. The Granite Wash, which stretches from Oklahoma to the Texas Panhandle, dropped 6 units to 26.
North Dakota and Ohio each lost 4 units to 101 and 31, respectively, reflecting 4 unit losses each in the Williston and Utica to 104 and 33, respectively. EIA also expects April production declines from the Bakken.
New Mexico and Wyoming each dropped 3 units to 58 and 29. Colorado dropped 2 units to 37. Kansas, Alaska, and Utah each edged down a unit to 14, 11, and 8.
Unchanged from a week ago were Pennsylvania at 47, California at 14, and Arkansas at 11.
West Virginia for the second straight week was the lone state to report a gain, again edging up a unit to 18.
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