24 Feb 2014 More

Oil Rig Count Reaches New 2014 High in US

posted by Unknown @ 09:20 0 Comments

Rig Counts - rigs in the Bakken
Baker Hughes is reporting that the US oil rig count is now at its highest level in 2014 yet.  The number of rigs in the US increased from 1416 to 1423.  Since the beginning of 2014 that means an increase of 3 percent, or 45 total rigs.

Biggest gains come from the Permian Basin (+21 rigs), Niobrara/DJ in the Rockies (+6), and the Cana Woodford in Oklahoma (+6).  Right now of the total 1423 rigs, 480 are in the Permian.  Following the Permian Basin are: Eagle Ford (187), the Williston (176), the Mississippian (68), or the Granite Wash (49).

Baker Hughes is reporting that even as rig count continues to increase, it estimates growth in 2014 to be about the same as 2013.  The total number of rigs is often a good indicator of the market to come.

Rig count flat lines after mid-recession boom

When the Great Recession hit, the oil industry was not spared the impact.  US oil rig count dropped dramatically from 400 to 175 in early 2009.  After bottoming out in the middle of 2009, with oil prices falling to $40 per barrel, the oil industry was getting ready for a boom.

As oil prices jumped to $70 per barrel in the 3rd quarter of 2009, raising capital funds became easier and new drilling began.  Couple this with the advent of new technologies, like shale oil and gas, and oil rig counts were off to the races.

Since the boom rig counts have leveled out

Oil rig counts leveled off in 2012 after years of gains.  After oil prices began steadying at $100 per barrel though, large E&P companies like ExxonMobil, Pioneer Natural Resources, Oasis Petroleum have stepped up operations in the Permian Basin among other regions.

Capital expenditure disclosures by the larger E&P companies show that 2014 will be another active year here in the US.  Oil rig counts will remain stable and perhaps even increase for the year.

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