Rig count unsteady during past week but some areas showing gains

The U.S. dropped 21 active rigs in the last week to 517 rigs (May 19), according to Enverus Rig Analytics.  The week-over-week swing is most likely due to rigs moving between wells, the firm said in a May 19 note. Oil rigs rose by four and gas rigs dropped by one during the past week.

The total rig count was up about 43% over this time in 2020 and up 86% since falling to a record low of 244 in August 2020.

The Williston Basin has made some gains over the last year. The basin, home to the Bakken/Three Forks play, has averaged 10-13 active rigs, with daily counts not exceeding 16. Also in the Rockies region, Utah was averaging three rigs through the first quarter of this year and recently the rig count jumped to nine at the beginning of May.

Other areas seeing slight gains have been Texas’ RRC Dist. 8 and 7B. Also, Oklahoma increased its rig count over the past month to 26 from 17.

WTI crude futures in the U.S. were trading below $64/bbl on May 21, putting the contract up about 31% so far this year after they dropped about 21% last year.

With prices mostly rising since October 2020, some energy firms reportedly plan to boost spending in 2021 after cutting drilling and completion expenditures over the past two years. That spending increase, however, remains small as most firms continue to focus on boosting cash flow, reducing debt and increasing shareholder returns rather than adding output.

According to the U.S. Energy Information Administration, U.S. oil output from seven major shale formations, including the Bakken, is expected to climb by 26,000 bbl/d in June to 7.73 million bbl/d, the first rise in about three months.

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