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Permian Basin Rig Count Is the Lowest since June 2010

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Comparing the Permian rig counts with others

Currently, there are 703 working oil rigs in the US. The Permian Basin has 242 of these rigs—more than any other region. The Eagle Ford Shale has 98 active oil rigs, the Williston Basin has 79, and the Mississippian Lime has 29.

Last week, the Permian Basin’s oil rig count fell by 13 over the previous week’s count. This marks 20 weeks in a row that the rig count declined in the Permian Basin. It was an ~5% decline from the previous week. Overall, the weekly US crude oil rig count was also down ~4%.

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The steep fall in the Permian Basin rig count suggests that producers operating in this region are slowing drilling activity. This should decrease production growth. It could even decrease production. Cabot Oil & Gas (COG), Concho Resources (CXO), and Chevron (CVX) are upstream and integrated producers operating in the Permian. Cabot Oil & Gas forms 0.07% of the SPDR S&P 500 ETF (SPY). Chevron accounts for 11.8% of the iShares US Energy (IYE).

One-year rig count comparison

In the past year, the number of active oil rigs in the Permian Basin declined by 295. The Permian Basin rig count is now at the lowest level since June 2010.

The Williston Basin lost 108 oil rigs in the past year. The Williston Basin includes the Bakken Shale—one of the most prolific crude oil shale plays in the US. The Eagle Ford Shale in south Texas lost 112 oil rigs. The Cana-Woodford Shale in Oklahoma’s Anadarko Basin added 21 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 EIA (U.S. Energy Information Administration), the Permian Basin produces the most crude oil in the US.

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