Houston — Total US oil and gas rig counts were down a net five last week to 825, rig data provider Enverus said Thursday, amid continued low commodity prices and producers' efficient operations and restrained capital outlays throughout domestic basins.
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Most of the rig reductions was seen in oil plays, where rigs fell by five to 678.There was a one-rig gain in rigs not classified as oil or gas. Rigs chasing natural gas dropped by one to 144 and fell to the lowest total since November 2016.
The total US rig count is the lowest since early February 2017.
"Some of the smaller basins across the US continue to drop rig counts in first-quarter 2020, but looking forward, Platts Analytics is expecting rig activity to remain relatively flat for the remainder of 2020 as oil prices hover around $50-$55/b," said Matt Andre of S&P Global Platts Analytics.
The largest US basins showed little week-on-week change, as most moved up or down a rig or two.
The Permian Basin of West Texas/New Mexico gained two rigs to 415, while the Eagle Ford Shale of South Texas shed two rigs leaving 80.
The Williston Basin situated in North Dakota/Montana and the DJ Basin largely in Colorado each remained steady for the third consecutive week at 54 and 26 rigs, respectively.
The Haynesville Shale in Northwest Louisiana/East Texas and the SCOOP/STACK plays in Oklahoma each gained a rig to 42 rigs each.
The Marcellus Shale largely in Pennsylvania also gained a net rig, making a total 39. This translated to the Marcellus Dry sub-category gaining three rigs to 21, while the Marcellus Wet lost two rigs, leaving 18.
The Utica Shale mostly in Ohio shed a rig for a total of 11.
One reason for the drop in rigs is smaller 2020 capex, as operators have walked their capital budgets back largely by single digits. The efficiencies during the last five years of $50-ish/b oil has taught producers to do more with less and eke oil and gas out of the ground at ever-lower breakeven prices.
"It's really impressive what operators have been able to do," Ted Hall, senior analyst at analytics firm Kayrros, said in webcast remarks last week at the Enercom conference in Denver. For example, in the Delaware Basin the average time for operators to drill and complete wells in Q4 2019 was eight days faster year on year, Hall said.
He noted some of the operators have cut their drilling times in half, which is "pretty significant when you think about how many wells you're able to turn out."
PERMIT TOTALS FALL
Permits approvals were down this week by a net 20 to 471, according to Platts.
The biggest drops were seen in the Wet Marcellus and the SCOOP-STACK, down 25 permits apiece, leaving totals for this week of 11 and nine, respectively. The Haynesville Shale saw a net gain of 20 permits, for a total 32.
Other named basins all saw gains or reductions of less than 10 each.
Oil prices, which recently reached lows not seen in many months, rallied this past week. WTI averaged $52.20/b, up $1.81; WTI Midland averaged $53/b, up $2.23; and Bakken Composite price was $48.37/b, up $2.39.
For gas, Henry Hub prices averaged $1.94/MMBtu, up 9 cents, while Dominion South prices averaged $1.70/MMBtu, up 12 cents.