The US oil and gas rig count climbed 15 to 674 in the week ended Nov. 3, energy analytics and software company Enverus said, as drilling activity in most oil-focused basins tested fresh pandemic highs.
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The number of rigs chasing primarily oil moved 16 higher to 528, marking the largest one-week increase since March and pushing the number of active oil rigs to the highest since April 2020.The number of rigs chasing mostly gas declined by 1 to 146.
The Denver-Julesburg play saw the biggest weekly jump, with operators adding three rigs for a total 16. The increase saw the basin rig count break out of its recent range and put it at the highest level since the week ended June 16.
The Eagle Ford rig count climbed two for a total 60, and Bakken operators added a single rig for a total 32. Rig counts in both plays were each the highest since April 2020.
In the SCOOP-STACK, the rig count climbed one to 39, the highest since the week ended March 11, 2020.
Notably, the number of rigs active in the Permian Basin was steady at 271, holding just below the basin's recent peak of 272 seen in early October.
Despite an overall decline in gas-focused activity, rig counts in the nation's top gas-focused plays were flat or higher on the week. The Haynesville basin rig count climbed one to 51, suggesting the rig count decline seen there in late summer may have bottomed.
Rig counts in the Marcellus and Utica shale plays were steady on the week at 33 and 13, respectively.
Oil demand growth to challenge rig rise: CEO
Projected 2022 US rig count increases of 20%-25% may not be enough to accommodate demand based on upstream producer statements about their drilling needs for next year, CEO Andy Hendricks of US land driller Patterson-UTI said Oct. 28.
Based on customer conversations as well as supply/demand forecasts, current heavy demand for available rigs and also reactivations of idled rigs, Hendricks sees "robust" activity increases for both Patterson and the overall US market in fourth quarter and into next year.
Moreover, "we could have current oil prices for a while and associated activity growth that goes along with that," he said.
"The market for the most capable rigs in the US is officially tight," Hendricks said. "We're sold out of [the newest, most capable Patterson-trademarked] rigs in the Permian. We've seen leading edge day rates move up in the last month and I expect that trend to continue."
Patterson has a total of 46 premiere rigs in the Permian, of which 41 are currently working, and four of the remaining five rigs are already committed to return to work.
"We are effectively are sold out of these rigs in the Permian basin," Hendricks said. "It's been a few years since we had this level of utilization and leading edge rates" for rigs.
Peer North American land driller Precision Drilling in its Oct. 21 quarterly call also noted a large number of bids for work in the US market, with CEO Kevin Neveu saying those opportunities were a "strong leading indicator of heightened customer interest" and implying it bodes well for future work.
Evercore ISI analyst James West recently also commented on the oilfield service sector's tight supply chain, labor tightness and likely deployment of more drilling rigs and hydraulic fracturing units going forward.