The EIA (US Energy Information Administration) has assessed that the number of active drilling rigs in the Permian Basin has increased significantly and sharply since last year, as compared with other regions.
In its latest US rig count report, oilfield services company Baker Hughes (BHI) reported that the number of active US rigs drilling for oil grew by 372 to 768 in the week ended August 11, 2017, compared with the previous year. In the week before (ended August 4, 2017), the US oil rig count was 765.
BHI’s report also noted that as of August 11, 2017, the number of rigs in the Permian Basin was 377. This number represents ~40% of the total oil and natural gas-directed rigs, or 949 rigs operating in the US.
The EIA’s August 2017 report showed that DUC (drilled but uncompleted) wells for the seven regions (the Bakken, Appalachia, Eagle Ford, Permian, Niobrara, Anadarko, and Haynesville regions) grew by 208 in June 2017, to 7,059 in July 2017. The Permian alone added 135 DUC wells and surpassed other regions. Adding the second-highest number of DUCs in July was the Eagle Ford, with 35 more DUC wells.
DUCs serve as an important indicator as they determine future oil and gas production from a particular region. Apache (APA), Cimarex Energy (XEC), and Concho Resources (CXO) are among the key Permian Basin players.
In the next part, we’ll take a closer look at recent Permian oil production growth forecasts.