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Permian Basin Rig Count Lowest since August 2010

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Comparing Permian rig counts with others

Currently, there are 760 working oil rigs in the US. The Permian Basin has 260 of these rigs—more than any other region. The Eagle Ford Shale has 110 active oil rigs, the Williston Basin has 89, and the Mississippian Lime has 40.

Last week, the Permian Basin’s oil rig count fell by 20 over the previous week’s count. This was the 18th consecutive weekly decline in the Permian oil rig count and a ~7% decline from the previous week. Overall, the weekly US crude oil rig count was also down ~5%.

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One-year rig count comparison

In the past year, Permian Basin activity has declined, with a loss of 272 oil rigs. The Permian Basin rig count is now at its lowest level since August 2010.

The Williston Basin lost 96 oil rigs in the past year. The Williston Basin includes the Bakken Shale—one of the most prolific crude oil shale plays in the United States. The Eagle Ford Shale in South Texas lost 100 oil rigs, while the Cana-Woodford Shale in Oklahoma’s Anadarko Basin added 12 oil rigs.

The Permian Basin

The Permian Basin is a combination of the Midland Basin and the Delaware Basin in western Texas and southern New Mexico. According to the US Energy Information Administration, the Permian Basin produces the most crude oil in the US.

The steep fall in the Permian Basin rig counts suggests producers operating in this region expect a slowdown in drilling activity and so, a decrease in production growth. These companies include Laredo Petroleum (LPI), Occidental Petroleum (OXY), and Cabot Oil & Gas (COG). Together, Laredo Petroleum and Cabot Oil & Gas form 3.1% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). Occidental Petroleum makes up 3.6% of the iShares US Energy ETF (IYE).

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