Houston — The US rig count dropped by 25 on the week to 1,183 for the period ended November 28, posting small reductions in most of the eight large domestic oil and natural gas basins, but with the Permian Basin by far the biggest loser, S&P Global Platts Analytics said Thursday.
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The Permian, located in West Texas and southeast New Mexico, fell by 12 rigs to 482, reversing most of the gains during the last month, according to Platts weekly rig count released each Thursday.
Last week's numbers came out Monday to accommodate the US Thanksgiving holiday.
The rig count has spent most of the second half of 2018 dangling just below 1,200 and only reached that figure in mid-November for the first time since early 2015.
The week-on-week decline, during a post-holiday week, is relatively high, but could be traceable to potential sluggishness during the Thanksgiving break coupled with limited Permian pipeline capacity.
The Permian is the largest producing oil and gas basin in the US with an estimated 3.6 million b/d of oil and 12.1 Bcf/d of gas output. But pipeline and other takeaway capacity is limited and virtually matches production. Experts say substantial new capacity will start coming online in the third quarter of 2019, although some new takeaway is already ramping up.
RIG DROPS LARGELY FROM OIL BASINS
Most of the rig reductions in the past week -- 19 -- came from oil-oriented basins, while five rigs chasing gas dropped out of active drilling. The numbers may not precisely add up because some rigs cannot be identified as either gas or oil, and so are assigned other categories according to Platts methodology.
Meanwhile, the Marcellus Shale, a large gas-oriented play mostly in Pennsylvania and neighboring states, lost three rigs to 53, while the Eagle Ford Shale of South Texas lost two to 93.
Another four basins lost a rig each, including the SCOOP/STACK of Oklahoma (down to 107), Williston of North Dakota and Montana (down to 63), Haynesville Shale in northwest Louisiana and east Texas (down to 59), and Utica Shale largely in Ohio and Pennsylvania (down to 16).
The sole basin that gained during the week was the Denver-Julesburg Basin of Colorado, up one to 32 rigs.
In addition, both oil and gas prices were down during the week, Platts average weekly assessments showed.
WTI fell to $51.17/b, down $4.29, and WTI Midland fell $4.65 to $44.46/b. Also, the average Henry Hub gas price was $4.33/MMBtu, down 24 cents, while the Dominion South price fell to $4.07/MMBtu, down 16 cents.
Drilling permits also fell substantially -- by 162 from the prior week to 1,040. The biggest change was in the DJ, which was down 96 permits week on week to 181. Permian was next, down by 24 to 121, while the SCOOP/STACK was down 10 to 28.
The Haynesville and Marcellus each lost 13 permits, to 13 and nine, respectively, while the Eagle Ford was down by four to 41. The Williston, however, was up six to 24, and the Utica was up one to eight.
-- Starr Spencer, email@example.com
-- Edited by Annie Siebert, firstname.lastname@example.org