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US rig count drop slows, only down by one
EIA: 2019 US production records with fewer rigs, wells; fewer, longer, horizontal wells; from 3.5 wells to 1.5 per month per rig
Kristen Nelson Petroleum News
Baker Hughes’ weekly U.S. oil and gas drilling rig count continues to drop, but only marginally the week ending June 26, down only one rig from the previous week to 265 from 266, although down 702 from a total of 967 a year ago.
Each week in the last eight has set a new record for low numbers of rigs, a count which the Houston oilfield services company has issued since 1944. Prior to this year, the low count was 404 rigs in May 2016.
New low records have now been set for eight weeks in a row: 374 rigs on May 8 of this year; 339 rigs on May 15; 318 on May 22; 301 on May 29; 284 on June 5; 279 on June 12; 266 on June 19; and this week’s new low of 265.
The count has been dropping steadily: down by one, 13, five, 17, 17, 21, 35, 34, 64, 73, 62, 64, 44 and 20 rigs respectively, a total of 469, over the previous 14 weeks.
The company said 188 rigs targeted oil, down one from the previous week and down 605 from a year ago, while 75 targeted gas, unchanged from the previous week and down 98 from a year ago. There were two miscellaneous rigs active, unchanged from the previous week and up by two from a year ago.
Twenty of the holes were directional, 230 were horizontal and 15 were vertical.
Alaska count unchanged Oklahoma (10) and Texas (112) were each up by one rig from the previous week.
Rig counts were unchanged for Alaska (3), California (4), Louisiana (32), North Dakota (10), Ohio (9), Pennsylvania (22) and West Virginia (5).
Colorado (5), New Mexico (50) and Wyoming (0) were each down by one rig from the previous week.
Baker Hughes shows Alaska with three active rigs for the week ending June 26, down by four from a year ago.
The rig count in the nation’s most active basin, the Permian (131), was down by one rig from the previous week, and down by 310 from a count of 441 last year; the DJ-Niobrara basin (4) was also down by one rig; rig counts in all other Lower 48 basins were unchanged.
Baker Hughes has issued weekly rig counts for the U.S. and Canada since 1944 and began issuing international rig counts in 1975.
The U.S. rig count peaked at 4,530 in 1981. This week’s count of 266 is a new low, surpassing lows set in the previous six weeks. Prior to that the previous low was 404 rigs in May 2016.
EIA: Drilling efficiency While supply and demand and the COVID-19 pandemic have been factors in the recent steep drop in active rigs, increased drilling efficiency has played an important role, with U.S. crude oil and natural gas production records in 2019 involving fewer rigs and fewer wells, the U.S. Energy Information Administration said in “Today in Energy” published online June 25.
The 2019 U.S. records of 12.2 million barrels per day of crude oil and 111.5 billion cubic feet per day of natural gas were pushed by increases in drilling efficiency, EIA said.
Preliminary data for last year shows an average active rig count per month of 943, and an average of 1,400 new wells drilled per month, the agency said, citing data from Baker Hughes and IHS Markit, with both rigs and wells “at the lower end of the range during the past 45 years, despite the record production.”
Horizontal drilling Horizontal drilling, allowing more contact with the formation, has been one factor in the production increase, with an average well length of 15,000 feet in 2019, reflecting longer horizontal lengths, EIA said.
The number of wells drilled each month per active rig peaked in 1985 at 3.6 wells per rig per month; by 2019, that average had dropped to 1.5 wells per rig per month. “By drastically increasing the horizontal length of wells, producers have increased production despite using fewer rigs and drilling fewer wells,” the agency said.
In the early 2000s horizontal wells in the U.S. averaged 10,000 feet of lateral length - that grew to 18,000 feet in 2019, and with horizontal wells now accounting for a larger share of new wells, “the average linear footage per well increased from 6,000 feet to 15,000 feet during the same period.”
EIA said increased productivity from horizontal wells more than offsets the fewer wells because horizontal wells have more wellbore in contact with the producing formation, increasing production compared with vertical wells. The average rig drilled 18,000-27,000 feet per month in 2019, EIA said, almost twice as far as in the early 2000s.
Horizontal wells have become prevalent in shale and tight formations, growing from some 2% of total wells in 1990 to more than 75% in 2019, with the number of new vertical wells decreasing since a recent peak in 2008.
“Horizontal wells have become the predominant way of drilling oil and natural gas wells in the United States,” EIA said, “first outnumbering vertical and directional wells combined in 2015. In 2019, 75% of newly drilled wells were horizontal, and they averaged 18,000 feet wellbores compared with directional wells, which averaged 10,000 feet, and vertical wells, which averaged 4,500 feet.”
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