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Highlights

Oil rigs down by 14, while gas rigs increase by six

Permian rig count dips by five, Williston drops three

Drilling permits increase 421 from previous weeks

Houston —

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The US oil and natural gas rig count fell by six to 1,065 in the week ending Wednesday, according to the latest data from S&P Global Platts Analytics, as nationwide totals continued the steady decrease seen during the past six months.

Oil-specific rigs accounted for the drop, falling by 14 to 838, while gas-driven rigs rose by six to 224. An increase of two was registered for rigs not specified for oil or gas.

The total US rig count the same week a year ago was 1,117. The oil and gas rig count averaged 1,071 in the prior week, and 1,084 the week before.

The domestic rig count reached 1,223 in mid-November 2018 but has gradually slipped since, although there have been some periodic weekly gains.

The biggest week-on-week movement was the Permian Basin of West Texas and southeastern New Mexico, which decreased by five rigs to 457. Next was the Williston Basin of North Dakota and Montana, down three rigs to 59.

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The Bakken Shale saw its rig count climb two to 65. North Dakota, home to the giant Bakken, this week reported oil output averaged 1.390 million b/d in March, up 4% from the previous month.

Rig movements in the other six named US basins were negligible.

In four plays, the number of rigs stayed the same: the SCOOP-STACK play in Oklahoma at 86; the Eagle Ford Shale in South Texas at 83; the Marcellus Dry play, mostly in Pennsylvania, at 35 ; and the Denver-Julesburg Basin, mostly in Colorado, at 32.

Three basins each gained one rig: the Haynesville Shale in East Texas and northwestern Louisiana at 59; the Marcellus Wet play, mostly in Pennsylvania, at 24 rigs; and the Utica Shale, mostly in Ohio, at 20.

PERMIT COUNTS UP

The number of drilling permits totaled 970 approved, up 421 compared with the previous week, Platts Analytics figures showed.

The Permian led all named basins with an increase of nine permits week on week for a total 213. The SCOOP-STACK was up by seven for a total 29 permits.

The Marcellus Wet was down by 16 permits on the week for a total of four; the Williston was down by 12 to five; and the Marcellus Dry was down by nine to 32.

In the "Other Basins" category, which represents plays outside the eight named basins, 445 more permits were approved than the previous week, for a total of 611.

A sizable chunk of drilling activity outside the major basins is fueled by privately held upstream operators, which account for about 40% of US onshore activity, sources say.

Active rig levels for public E&P companies, which drive 60% of drilling activity, are widely expected to fall in the second half of this year, although "privates should not be ignored," investment bank Tudor Pickering said in an investor note Thursday.

"A portion of the incremental cash flow that comes with higher-than-anticipated crude oil prices will go to the drill bit for this bunch," TPH said, rather than returned to shareholders through dividends or share repurchases as public companies have done recently.

And while majors are adding activity, too, year over year, TPH's E&P coverage universe, which includes about half the current US onshore rig count, is expected to drop another 30-plus rigs, the bank said. That will likely result in a net rig count decline for 2019, "But the drop-off might not prove quite as steep as we thought earlier this year," TPH said.

-- Starr Spencer, starr.spencer@spglobal.com

-- Edited by Jim Levesque, newsdesk@spglobal.com

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