Houston — The US oil and gas rig count rose six to 519 in the week ended March 31, rig data provider Enverus said, as totals in the Permian Basin and Eagle Ford Shale continued to climb.
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The Permian, sited in West Texas/southeast New Mexico, and Eagle Ford, in South Texas, each picked up four rigs week on week for respective totals of 236 and 41, marking their highest levels in nearly a year.
Since the start of 2021, the Permian has added 60 rigs and the Eagle Ford has gained 10.
The increase in nationwide rig counts was attributed to the oil side, which grew by six to 393. Gas rigs were static at 126.
Weekly changes in rig fleets within the largest US basins were mostly up or down a unit or unchanged, although the Williston Basin of North Dakota and Montana lost two rigs, leaving 14.
The Haynesville Shale of East Texas and Northwest Louisiana gained one for a total of 48, while the SCOOP/STACK play in Oklahoma and DJ Basin of Colorado were each down a rig, leaving 18 and 13, respectively.
Unchanged on week were the Marcellus Shale of largely Pennsylvania at 33 rigs, and the Utica Shale of Ohio at 12.
A 'new normal' for rig adds
So far this year, the total oil and gas rig count is up 113, equating to a robust average gain of about nine rigs per week. The count has increased every week save for once in mid-February, when it stood still for a week, before surging by 30.
Those sorts of increases are typical over time in an upturning market, petroleum economist and WTRG Economics founder James Williams said.
"I think this is the new normal" for rig adds each week, Williams said.
Parker Fawcett, North American supply analyst for S&P Global Platts Analytics, foresees an average addition of six to seven rigs weekly to the domestic fleet this year, assuming oil prices at current levels.
Prices for both WTI and Brent are over $60/b, providing E&Ps and national oil companies with "more than enough" cash flows to continue "unfettered" with their 2021 plans, Evercore ISI analyst James West said.
But perhaps more important is Primary Vision's US frac spread data count, which hit the "magical number" of 200 last week, up by five week on week, West said in a March 29 report.
"That is a figure which seemed impossible nine months ago, although [it is] still 10% below our estimate required to keep US oil and gas production flat," he said, adding the rising frac spread count comes amid a looming equipment supply shortage. "We still believe the active count needs to approach 225 in order to maintain US production levels."
The 200 frac spread figure is the highest in 51 weeks, Platts Analytics' Fawcett said.
For the week ended March 31, WTI crude oil prices averaged $60.15/b, down 21 cents, while WTI Midland averaged $60.54/b, down 7 cents, and the Bakken Composite $60.28, down 25 cents.
Natural gas prices barely moved, with Henry Hub prices up 1 cent to $2.48/MMBtu, and Dominion South down 3 cents to $1.84/MMBtu.
Private operator activity upside
Over the past five weeks, the horizontal rig count by public E&P producers is unchanged, investment bank Tudor Pickering Holt noted, while private operators have added 38 horizontal rigs.
"Private E&Ps now collectively account for a record roughly 46% of total US land horizontal rig count," compared to a 2019 average of around 36%, TPH said in its daily March 29 investor note.
"While we continue to believe the public universe of E&P operators will likely only add modestly to their current activity levels in the coming months, it's becoming clear based on recent weeks that there is some upside potential to private [operator] activity levels with WTI at or above the $60/b level," the bank said.