Author Topic: US Sees First Double-Digit Oil Rig Count Increase In 8 Months  (Read 332 times)

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Offline Elderberry

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US Sees First Double-Digit Oil Rig Count Increase In 8 Months
« on: December 21, 2019, 10:43:06 AM »
Oil Price by Julianne Geiger - Dec 20, 2019

The US oil and gas rig count increased by double digits this week, according to Baker Hughes, reaching 813 rigs after increasing by 14 for the week, according to Baker Hughes.

For oil rigs, this week saw an increase of 18 rigs—the first double-digit growth since the beginning of April, according to Baker Hughes data.

The total oil and gas rig count is now 267 down from this time last year.

The total number of active gas rigs in the United States fell by 4 according to the report, reaching 125. This compares to 197 a year ago.

The number of oil rigs have declined by 198 this year alone, but production has grown from 11.7 million bpd at the beginning of the year to 12.8 million bpd,­ for week ending Dec 13—just 100,000 bpd off the all-time high from a few weeks ago.

More: https://oilprice.com/Energy/Energy-General/US-Sees-First-Double-Digit-Oil-Rig-Count-Increase-In-8-Months.html

Offline MajorClay

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Re: US Sees First Double-Digit Oil Rig Count Increase In 8 Months
« Reply #1 on: December 21, 2019, 11:29:07 AM »
The number of oil rigs have declined by 198 this year alone, but production has grown from 11.7 million bpd at the beginning of the year to 12.8 million bpd,­ for week ending Dec 13—just 100,000 bpd off the all-time high from a few weeks ago.

Think this is because of the "drilled but uncompleted" category.

Offline IsailedawayfromFR

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Re: US Sees First Double-Digit Oil Rig Count Increase In 8 Months
« Reply #2 on: December 21, 2019, 11:50:58 AM »
The number of oil rigs have declined by 198 this year alone, but production has grown from 11.7 million bpd at the beginning of the year to 12.8 million bpd,­ for week ending Dec 13—just 100,000 bpd off the all-time high from a few weeks ago.

Think this is because of the "drilled but uncompleted" category.
I'd like to believe it is higher productivity per well or faster drilling but your idea has more merit
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Online Smokin Joe

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Re: US Sees First Double-Digit Oil Rig Count Increase In 8 Months
« Reply #3 on: December 22, 2019, 12:52:40 AM »
I'd like to believe it is higher productivity per well or faster drilling but your idea has more merit
I think it is a combination of factors.
Fewer exploration wells are being drilled when the ROI looks grim in view of unconventional resources, DUCs, and prices likely staying relatively low in the future. DIscounts in areas where takeaway capacity is limited are a further drag on development and completions.
DUCs are at an all time high, about half of those in the Permian Basin, and there are still takeaway capacity issues there, and everywhere else, for that matter. Infrastructure still hasn't caught up. Between prices and capacity issues, those will likely keep the DUC count high.


In addition, drilling has become far more efficient in just the past few years: 300 ft./hr used to be considered really good, now 500 ft./hr is the standard in the Bakken/Three Forks play. So one rig can do 4 wells in 6 weeks tops, (with casing strings and liner, from surface), where 4 wells took a year in the 80s, and were only vertical wells. That incredible increase in performance and tool reliability means that rigs can drill as much as double (or more) their number could just 10 years ago.

So, the emphasis of the industry shifts, from drilling to infrastructure to handle the new capacity, to compltions, depending on which is lagging, and as it lags, the competition in the shrinking seectors to perform as never before is intense. The production and midstream sectors are about the only part of the industry I expect to see steady growth in the near term. I expect the rest will maintain current levels in developmental drilling.
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