Six of seven-rig decrease from Texas, Kansas plays
Slight rig changes from US unconventional basins
Expect rig count to surpass 300 by year-end
Houston — The US oil and gas rig count dropped by seven on the week to 282 with small plays along the Texas Gulf Coast and Kansas accounting for most of the decrease, rig data provider Enverus said Aug. 27.
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Register NowThe Gulf Coast rig removals, accounting for three rigs of the weekly decrease for the period ended Aug. 26, came about the same time as Hurricane Laura, which made landfall around southwest Louisiana's refining center early Aug. 27 as a powerful Category 4 storm.
But any relationship of the onshore rig count to the offshore storm may be better known next week if the rigs are restored.
Another three-rig decrease in recent days came from Salina, a small niche play in Kansas, which in July and early August only had one to four rigs running.
But in mid-August, the play's rigs jumped to six from two, held at six for two weeks, and in recent days plunged to three, Matt Andre, an analyst with S&P Global Platts Analytics said.
"It was more of a surprise that it increased to six rigs [earlier this month] rather than falling back to three," Andre said, since drilling there is carried out by vertical-only rigs, which suggests it is not an unconventional play.
Otherwise, within the unconventional plays there was little movement the past week.
Permian loses another rig
Losing one rig each were the Permian Basin of West Texas, the DJ Basin of Colorado and the natural gas-oriented Haynesville Shale of East Texas/Northwest Louisiana. That brought their totals to 127, six and 36 respectively, Enverus data showed.
The Permian's 127 rigs represents the fourth consecutive week of rig losses for that basin. In the last week in July, the Permian, the largest domestic oil play, was running 138 rigs.
The Eagle Ford Shale of South Texas gained a rig, for a total of 10.
All other basins, such as the Bakken Shale of North Dakota/Montana and two gas-prone basins, Marcellus Shale largely in Pennsylvania and Utica Shale mostly in Ohio, were unchanged. That left the Bakken with 10 rigs, the Marcellus Shale with 25, and the Utica Shale with six.
Platts Analytics expects the US rig count to climb in the second half of the year, closing out the year at around 309.
"That will be mostly driven by gas-focused drilling in areas such as the Haynesville, which should gain about 20 rigs, and to a lesser degree the Marcellus, up by seven, and the Utica, up by three from August to December," he said.
"We are also expecting the Permian Delaware on the Texas side to rise by about 14 rigs, and the Bakken Shale by 10 rigs in the fourth quarter," he added.
Rig count average hovers around 290
The US oil and gas rig count hit its recent low of 279 in early July as upstream operators have continued to optimize their drilling programs at a time of lingering low oil prices stemming from the coronavirus pandemic which began to decimate crude demand earlier this year.
Since then the average active domestic rig fleet has gained about 4% and the total count has hovered around 290.
The past week's rig count decline of seven all came from oil-directed rigs, leaving 194. Gas-directed rigs remained the same for the third consecutive week at 88.
US oil prices lingered in the low $40s/b during the week, although mostly up a bit from the previous week.
WTI averaged $42.76/b, up 17 cents, while WTI Midland averaged $42.88/b, up 31 cents. Bakken Composite prices, however, were down two cents to $40.63/b.
For gas, prices at Henry Hub averaged $2.44/MMBtu, up 17 cents, while at Dominion South, prices averaged $1.25/b, up six cents.
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US oil, gas rig count drops by seven to 282, mostly from small plays - S&P Global
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