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How US Onshore Rigs Drove Rig Count Fall for 25th Straight Week

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Onshore rig count is down again

During the week ended May 15, 2015, the US land-based, or onshore, rig count fell by six from the previous week’s count. Last week, there were 854 land-based rigs, including two inland water rigs. The inland water rig count increased by two from the previous week.

The onshore rig count had been on an uptick since the beginning of 2014, but depressed crude oil prices ended that trend.

Last week, the onshore rig count declined for the 25th consecutive week. Among the major movers last week, Texas and Wyoming lost six and two rigs, respectively. Kansas, on the other hand, added four rigs.

In the 12 months ended May 15, 2015, the land-based US rig count fell by 950. The number of active land-based rigs declined the most in Texas, where 517 rigs shut down. North Dakota lost 95 rigs last year.

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Onshore rig count records

The land-based rig count hit a record high of 1,992 on November 4, 2011, the highest number of rigs in operation since January 1990, according to Baker Hughes. The onshore rig count reached 1,876 in the week ended November 21, 2014. A total of 1,022 onshore rigs have gone offline since November 2014, a decline of ~54%.

Oilfield service companies provide various drilling-related services and technologies. The falling rig count will negatively impact oilfield service companies. Oilfield service companies include C&J Energy Services (CJES), Oil States International (OIS), Cameron International (CAM), and National Oilwell Varco (NOV). Combined, OIS, CAM, and NOV form 11.7% of the VanEck Vectors Oil Services ETF (OIH).

Most prolific states

Despite the recent decrease, Texas still has the most land-based rigs in the US, with 378, or 44%, of the total. Oklahoma is next with 103 land-based rigs. North Dakota has 79 land-based rigs.

In the next part, we’ll discuss how the offshore rigs fared last week.

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