Rig Count Update: June 7, 2019


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US Rig Count

Reuters – U.S. energy firms this week cut the oil rig count to the lowest since February 2018 as drillers follow through on plans to reduce spending with crude prices collapsing to a four-month low.

More than half the total U.S. oil rigs are in the Permian Basin in West Texas and eastern New Mexico, where active units decreased by six this week to 446, the lowest since April 2018. The Permian is the biggest U.S. shale oil play.

The rig count, an early indicator of future output, declined over the past six months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.

U.S. financial services firm Cowen & Co this week said that projections from the exploration and production (E&P) companies it tracks point to a 5% decline in capital expenditures for drilling and completions in 2019 versus 2018.

Cowen said independent producers expect to spend about 11% less in 2019, while major oil companies plan to spend about 16% more.

In total, Cowen said all of the E&P companies it tracks that have reported will spend about $81.9 billion in 2019 versus $86.4 billion in 2018.


Oil futures climbed for a second straight session Friday, with U.S prices erasing their loss for the week just two days after dipping into a bear market.

West Texas Intermediate crude for July delivery rose $1.40, or 2.7%, to settle at $53.99 a barrel on the New York Mercantile Exchange, climbing back up from the five-month lows hit earlier in the week. WTI saw a 0.9% rise for the week.

Worries about weak energy demand and burdensome U.S. supplies had combined push benchmark prices into bear market territory this week. On Wednesday, front-month futures finished at $51.68 — 22% below their most recent high of $66.30 from April 23, marking WTI’s entry into a bear market.

The international benchmark August Brent was +1.20% adding $1.62, or 2.6%, to end at $63.29 a barrel on ICE Futures Europe. Before the late-week rebound, front-month contract prices recorded their lowest finish since Jan. 28 at midweek, nearly dropping back below $60. A finish below $59.65 would mark Brent’s entry into a bear market. The contract rose 2.1% for the week.


Weekly Summary: 
Total rigs engaged in the exploration and production in the U.S. plummeted for the week ended June 7, 2019, decreasing 9 rigs falling to 975.  Land rigs lost 9 falling down to 948. The offshore rig count remained flat at 23. Rigs drilling in the inland waters remained flat with 4 rigs running.

Oil Rig Count:  
The US crude oil rig count lost 11 rigs, dropping from 800 to 789 for the week. There are 73 fewer rigs targeting oil than last year. Rigs drilling for oil represent 80.9 percent of all drilling activity.

US oil rigs tested an all-time high of 1,609 in October 2014. In contrast, the rigs hit 316 in May 2016—the lowest level since the 1940s.

Natural Gas Rig Count: 
The natural gas rig count – which plunged to its lowest in August of 2017 –  rose by 2 rigs up to 186.  The number of rigs drilling for gas is 12 rigs fewer than last years count.

US Rig Count Summary



Louisiana was the sole leader and gained 4 rigs.


SEVEN states were unchanged, namely Arkansas, California, Colorado, New Mexico, Ohio, Utah, and Wyoming


Texas lost 7 rigs, Pennsylvania dropped down 2 rigs, while Alaska, North Dakota, Oklahoma, and West Virginia all lost 1 rig each.


Summary of Major Plays – Ranked By Rig Count

– Permian Basin 446 rigs compared to last week’s 452 rigs

– Eagle Ford 74 rigs compared to last week’s 75 rigs

– Cana Woodford 44 rigs compared to last week’s 45 rigs

– Williston 56 rigs compared to last week’s 57 rigs

– Marcellus 58 rigs compared to last week’s 61 rigs

– Haynesville 53 rigs compared to last week’s 51 rigs

– DJ-Niobrara 28 rigs compared to last week’s 29 rigs

– Utica 18 rigs compared to last week’s 18 rigs

– Granite Wash 8 rigs compared to last week’s 7 rigs

– Ardmore Woodford 6 rigs compared to last week’s 5 rigs

– Arkoma Woodford 3 rigs compared to last week’s 3 rigs

For more details on the latest national and state news regarding last Friday’s Baker Hughes rig count data, check out the interactive rig count dashboard on the Oklahoma Index tab of our website.


Compiled and Published by GIB KNIGHT

Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.

SOURCES: Baker Hughes, Reuters

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