US onshore rig count
During the week ending November 25, 2015, the US onshore rig count fell by 13. In the week ending November 25, there were 714 land-based, or onshore, rigs including one inland water rig. There was one inland water rig idled in the week ending November 25.
Over the past 14 weeks, 139 onshore rigs, or 16%, have been idled. As of November 25, the onshore rig count is at its lowest point since May 2002.
In a statewide breakdown of rigs, Texas lost six onshore rigs in the week ending November 25. Eight other states also lost onshore rigs last week. In comparison, only two states added onshore rigs during the week. The US onshore rig count had been on a continuous slide until the week ending May 22. It fell for 25 straight weeks. After stabilizing slightly, the count started falling again.
Most prolific states
In the 12 months ending November 25, 2015, the land-based US rig count fell by 1,149, or 62%. The number of active land-based rigs fell the most in Texas—566 rigs, or 63%, shut down. North Dakota lost 118 rigs, or 66%, over the same 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 334, or 47%, out of the country’s total as of November 25, 2015. Oklahoma is next. It has 82 land-based rigs. North Dakota had 62 as of the same date.
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. The onshore rig count was 1,876 in the week ending November 21, 2014.
Impact on energy companies
The total number of onshore rigs in operation mainly reflects the US shale boom. Apart from upstream oil and gas companies, the falling rig count can negatively impact oilfield service companies.
These companies provide various onshore and offshore drilling services and technologies. They include National Oilwell Varco (NOV), Oil States International (OIS), Dresser-Rand Group (DRC), and Weatherford International (WFT). National Oilwell Varco forms 0.1% of the SPDR S&P 500 ETF (SPY).
A falling rig count could also potentially have a long-term negative impact on midstream MLPs like Targa Resources (NGLS), Sunoco Logistics (SXL), Boardwalk Pipeline (BWP), and Energy Transfer Partners (ETP). A falling number of rigs could lower the companies’ throughput volumes.
In the next part, we’ll analyze the US offshore rig count as of November 25, 2015.