Onshore rig count
During the week ending July 2, 2015, the US land-based, or onshore, rig count rose by two from the previous week’s count. Last week, there were 833 land-based rigs, including five inland water rigs. The inland water rig count fell by two. Last week, five states lost onshore rigs, while seven others added onshore rigs.
The week to July 2 marked the third rise in the past seven weeks. US onshore rig count was on a continuous slide until the week ending May 22. It fell for 25 straight weeks.
Most prolific states
In the 12 months ending July 2, 2015, the land-based US rig count fell by 987. The number of active land-based rigs fell the most in Texas—530 rigs shut down. North Dakota lost 95 rigs over those 12 months. 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 106 land-based rigs and North Dakota follows with 74.
Onshore rig count records
The onshore 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 1,043 onshore rigs have gone offline since then—a fall of ~56%.
Impact on energy companies
Onshore rigs in operation mainly reflect the US shale boom. Apart from oil and gas-producing companies, the rising rig count will positively 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 Schlumberger (SLB). Combined, these companies form 27.5% of the VanEck Vectors Oil Services ETF (OIH).
Rising rigs could also eventually benefit midstream MLPs (master limited partnerships) like Targa Resources Partners (NGLS), Sunoco Logistics Partners (SXL), Boardwalk Pipeline Partners (BWP), and Energy Transfer Partners (ETP) in the long term. It would boost their throughput volumes.