Land Rigs down to 800 by Summer?
The Baker Hughes US Land Rig Count declined to 1,058 down -5.6% this week. WTI fluctuated today hovering around $45 per barrel. Here’s a summary chart for the past week:
Summary of Shale Play Rig Counts
- Permian Basin -6.6% to 311 rigs compared to last week’s 333 rigs
- Eagle Ford -2.0% to 146 rigs compared to 149 the prior week
- Williston Basin -3.7% to 104 from last week’s 108 rigs
- Marcellus +1.6% to 63 from the previous week’s 62 rigs
- Mississippian -4.5% to 42 from last week’s 44 rigs
- DJ-Niobrara -5.9% to 32 rigs compared to last week’s 34
- Utica -10.8% to 33 from last week’s 37 rigs
- Cana Woodford +8.1% to 40 from previous week’s 37 rigs
- Haynesville -10.5% to 34 from last week’s 38 rigs
Rig Count Projections
Several research firms have advised that rig counts will be in the 800’s or 900’s during summer, with Bloomberg Intelligence reporting they may not stabilize until the third quarter. Instead of estimating or forecasting what the rig count might be, we think there’s as much value in looking at operator details by basin.
A Bottoms-up Rig Forecast
From a bottoms-up perspective, the following operators have indicated how many rigs they will be maintaining:
- Concho Resources (NYSE: CXO) will have 26 rigs running in the Permian in 2015
- Antero Resources (NYSE: AR) will run 7 Utica rigs and 7 Marcellus throughout the year
- ConocoPhillips (NYSE: COP) has 12 rigs in the Eagle Ford and 7 Bakken rigs
- Newfield Exploration (NYSE: NFX) will focus in the Anadarko Basin with 10 rigs running
- EP Energy (NYSE: EPE) began the year with 12 rigs but will reduce to 6 throughout the year
- Oasis Petroleum (NYSE: OAS) will maintain 5 Bakken rigs in 2015
With the above, you get a realistic view of operator activity. The sound bite may be that operators are cutting budgets, but the savvy oilfield sales professionals see this as an opportunity to earn business back from weaker competitors. Taking a bottoms-up view allows you to make operator rig counts actionable.