Friday, April 4, 2014

Baker Hughes Rig Counts: Oil Up 11 Gas Down 2

Another week, another U.S. multi-year high for oil rigs, another low for natural gas rigs.  Oil rigs were up 11, of which oil horizontals were up 13, thanks to the great state of Texas.

Canadian activity fell sharply, consistent with seasonal norms.  Expect the drilling activity in Canada to recover soon and be robust this year, with prices (and inventories) supporting expanded gas development.

The story for Texas oil rigs....relentless increases, this time split between the Permian and the Eagle Ford:

Oklahoma was also a winner this week, picking up 3 gas and 2 oil rigs

In the Marcellus/Utica, activity was up slightly, as PA gained 3 gas rigs, no change in Ohio (both oil and gas rig counts flat), and West Virginia dropped 1 gas rig.  Drilling activity remains at high levels, propelling production forecasts higher into the foreseeable future, with a combined 35 horizontal rigs active in the Utica and 72 horizontals in the Marcellus.

Canadian drilling activity is falling to its seasonal low, but it is worth noting that British Columbia has a swelling gas rig count that suggests a steep rise in their (currently low) output is imminent.