For August 2016 Patterson-UTI Energy Inc. reported an average of 60 drilling rigs operating in the U.S. The company’s rig count has increased by 11 units since late April. It is one of the signs of “cautious optimism” that U.S. land drillers are pointing to as the Baker Hughes rig count continues its slow climb upward.
Helmerich & Payne’s President and CEO John Lindsay said in a fiscal third-quarter release, “Even though oil prices have pulled back over the past several weeks, it is encouraging to still see signs of optimism in the market. In May the BHI [Baker Hughes] U.S. land rig count troughed at 380 rigs and has since increased from what everyone hopes was the absolute bottom of this market cycle.
“Recently, some E&P companies have announced budget increases and rig count additions. It is a positive sign, but many still remain on the sidelines. Time will tell whether momentum is truly building in the market; a few datapoints do not make a trend.”
Kevin Neveu, president and CEO of Precision Drilling, said in the company’s second-quarter 2016 report, “Our customers appear to be looking beyond the oil price lows of earlier this year, resetting spending to current commodity price levels and beginning the early stages of planning for improved longer term fundamentals.”
Helmerich & Payne expects an increase in revenue days between 3% and 7% during the fiscal fourth quarter. (Source: Helmerich & Payne Inc.)
For Sept. 30 the Baker Hughes U.S. land rig count was up nine rigs to 497. There’s still a huge gap in where the rig count was and where it is now. As Helmerich & Payne noted in a presentation at Barclays 2016 CEO Energy-Power Conference in September, more than 1,400 rigs have been idled in the U.S.
“Nevertheless, as oil and gas prices recover, the market is displaying some early signs of optimism,” the company said.
What other signs of optimism are there? Patterson-UTI reported Sept. 14 that it entered into an agreement to acquire Warrior Rig Ltd., a Calgary-based company that designs, manufactures and services high-specification rig components, with a recent focus on top-drive technology.
Patterson-UTI’s CEO Andy Hendricks stated, “This acquisition will enhance our competitive position within the high-spec rig market and expand our technology portfolio.”
The company also pointed out that it expects to spend about $200,000 per rig in reactivation costs, and the company is reactivating rigs and rehiring. The company added that about 90% of recent hires are former employees.
Helmerich & Payne expects to see an increase in revenue days between 3% and 7% during the fiscal fourth quarter. As of Sept. 7, the company had 94 land rigs contracted, with the majority of the rigs in the Permian Basin (44 rigs), Oklahoma Woodford (20 rigs) and Eagle Ford (15 rigs).
“Our drilling fleet totals 94 drilling rigs, of which 16 are working under contract after rebounding from a low of 13 drilling rigs during the second quarter,” said Unit Corp. CEO and President Larry Pinkston Aug. 4.
Perhaps spring is just around the corner and the drilling industry will once again be blooming.
Permian oil production is expected to rise by 40,000 barrels per day to about 4.18 million barrels per day in April.
Oil firms Equinor and Rosneft expect to extract some 250 million barrels of oil and 23 billion cubic meters of gas during the first part of the development of the Severo-Komsomolskoye oilfield in Russia, Equinor said on Dec. 23.
Repsol will still hold a 51% stake in the block after the deal.