Onshore rig count
During the week ending June 19, 2015, the US land-based, or onshore, rig count didn’t change from the previous week’s count. Last week, there were 830 land-based rigs, including five inland water rigs. The inland water rig count increased by one. In the week to May 22, onshore rigs registered their first rise after falling for 25 consecutive weeks.
The onshore rig count had been on an uptick since the beginning of 2014. However, depressed crude oil prices starting in the later half of the year ended that trend.
Last week, five states lost onshore rigs, while five others added onshore rigs.
In the 12 months ending June 19, 2015, the land-based US rig count fell by 969. The number of active land-based rigs fell the most in Texas—523 rigs shut down. North Dakota lost 93 rigs over those 12 months.
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. Then, the onshore rig count reached 1,876 in the week ending November 21, 2014. A total of 1,046 onshore rigs have gone offline since then—a fall of ~56%.
Onshore rigs in operation mainly reflect the US shale boom. Apart from oil and gas-producing companies, the falling rig count will negatively impact OFS (oilfield service) companies. OFS companies provide various drilling-related services and technologies. These include RPC (RES), Oil States International (OIS), Cameron International (CAM), and National Oilwell Varco (NOV). Combined, these companies form 12.1% of the VanEck Vectors Oil Services ETF (OIH).
They will also negatively affect midstream MLPs (master limited partnerships) like Targa Resources Partners (NGLS), Sunoco Logistics Partners (SXL), Boardwalk Pipeline Partners (BWP), Energy Transfer Partners (ETP), and Northern Tier Energy (NTI).
Most prolific states
Despite losing a significant number of rigs in the past year, Texas still has the most land-based rigs in the US with 363, or 44%, of the total. Oklahoma is next with 105 land-based rigs and North Dakota follows with 77.
In the next part of this series, we’ll see how offshore rigs fared last week.