Rig Count Continues Decline
For seven weeks in a row, the rig count is down, which implies upcoming declines in domestic crude output. The total active U.S. rig count fell by 57 to 408, according to Baker Hughes Co. data. As of April 29, the total U.S. rig count is down 33 from last week to 415.
According to the Energy Information Administration (EIA), the number of active natural gas rigs in the U.S. fell to 85 on April 21, the lowest number of active natural gas rigs since August 2016. As of that date, there were 38 fewer (31%) active natural gas rigs than at the beginning of 2020 and 101 fewer (54%) than last year at the same time.
Natural gas-directed rigs remained concentrated in the Marcellus Basin in Ohio, Pennsylvania, and West Virginia and in the Haynesville Basin in Louisiana and Texas. These two basins accounted for 50% of the decrease in natural gas-directed rigs over the past year, and 78% of remaining natural gas-directed rigs in the U.S. operate in these basins.
In 2019, production rose even though the rig count decreased, reaching a record-high 96.3 Bcf/d of dry natural gas production in November. Since then, dry natural gas production has declined as relatively low natural gas prices have diminished the economic incentive for producers to drill new natural gas wells. Similarly, associated natural gas production has fallen as the lower price of oil has reduced the incentive to drill oil wells.
Completion of drilled but uncompleted wells (DUCs) has likely offset some of the decrease in production from newly drilled wells, according to the EIA’s most recent drilling productivity report. As of March 2020, the number of DUCs was 13% (1,052 DUCs) lower than the peak in May 2019. This drop indicates that more wells are being completed than are being drilled.
2022-05-24 - Daniel Kohl joins Opportune Partners with over a decade of energy industry experience, most recently as head of A&D advisory at UBS, where he managed and directed all A&D and technical advisory efforts for the energy investment bank.
2022-05-12 - Headquartered in Houston, Enstor Gas is the largest privately owned natural gas storage company in the U.S. including six active underground natural gas storage facilities with more than 110 Bcf in working gas capacity.
2022-05-09 - The $300 million commitment announced May 3 is the fourth EnCap Flatrock growth equity commitment to Rangeland Energy companies, bringing the total to $900 million since Rangeland’s formation.
2022-03-09 - “Whit’s deep strategic, operational and commercial experience in the LNG industry including the successful leadership of complex joint venture companies will be an asset to Cameron LNG,” commented Lisa Glatch, chair of the board.
2022-04-28 - Marcia Backus currently serves as senior vice president, general counsel and chief compliance officer of Occidental Petroleum, where she oversees more than 60 lawyers in the U.S. and at Oxy's assets around the world.