Land-based rig counts are down
During the week ended November 7, the U.S. onshore—or land-based—rig count decreased by four from the previous week’s count. The count was 1,872. Land-based rigs include 13 inland water rigs. The inland water rig count decreased by one last week.
Despite the fall, the onshore rig count is close to the highest it’s been since August 2012. It was higher the previous week at 1,876. The onshore rig count has been on an uptrend since the beginning of 2014. However, some jittery movement in the past month upset this trend.
Year-to-date, the land-based U.S. rig count is up 182, or ~11%. The number of offshore rigs decreased by eight since the beginning of 2014. This year, land-based rigs increased mostly in Texas and Oklahoma, by 75 and 39, respectively.
Texas also has the highest number of land-based rigs in the U.S. It has 905, or 48%, of the total U.S. land-based rigs. Texas is followed by Oklahoma. It has 208 land-based rigs. North Dakota has 181 land-based rigs.
3Q14 rig counts
In 3Q14, U.S. land-based rig counts increased 3% to 1,842, compared to 1,796 rigs in 2Q14. Land-based rigs were up 8% from the 1,709 rigs recorded in 3Q13. In 3Q14, well counts increased the most in the Cana Woodford at ~28%, the Arkoma Woodford at ~16%, and the DJ-Niobrara at 10%, compared to 2Q14.
Rig service companies show mixed sentiments
In their 3Q14 earnings, rig servicing companies, such as Schlumberger Limited (SLB) and Baker Hughes Incorporated (BHI), were cautiously bullish about U.S. drilling activities for the rest of the year.
In its latest earnings press release, Baker Hughes said, “we project the U.S. onshore well count will continue to modestly increase into the fourth quarter as we expect the holiday period slowdown to be less pronounced than prior years.”
In its 3Q14 press release, Schlumberger didn’t explicitly disclose its outlook for U.S. rig activity. It did, however, express concern about the energy oversupply. It said, “market sentiments are currently driven by short-term oversupply due to the continued growth in North America production.”
You can learn more by reading Overview: Oil and gas field service Schlumberger’s 3Q14 results.
Land-based rig counts can gauge land-based upstream energy companies’ activity levels. These companies include Southwestern Energy Company (SWN) and WPX Energy Inc. (WPX). Some of these companies are part of the S&P Oil & Gas Exploration & Production ETF (XOP).