Less Volatility and +0.4% More Rigs This Week

Less Volatility and +0.4% More Rigs This Week

The Baker Hughes (BHI) US land rig count improved this week by adding 3 rigs, bringing the count to 844 rigs from last week’s 841 rigs (a 0.4% increase). For the week, -2 horizontal rigs were dropped while +4 vertical rigs and +1 directional rig were added.

Fayetteville saw the most action, adding +2 rigs and bringing the count to 8 rigs from last week’s 6 rigs. There was also activity in the miscellaneous category adding +6 rigs, half of which were horizontal and the other half directional. Basins that dropped one rig include Eagle Ford, Williston, Utica and Cana-Woodford. Overall, Texas was flat for the week, keeping a steady count at 372 rigs, the same as last week.

energent-rig-count-20150522

Summary of Shale Plays

  • Permian Basin stayed flat at 233 rigs
  • Eagle Ford dropped -0.9% to 107 rigs from last week’s 108 rigs
  • Williston Basin decreased -1.3% to 78 rigs from last week’s 79 rigs
  • Marcellus stayed flat at 66 rigs
  • Mississippian stayed flat at 22 rigs
  • DJ-Niobrara stayed flat at 30 rigs
  • Utica decreased -4.0% to 24 from last week’s 25 rigs
  • Cana Woodford dropped -2.9% to 34 rigs from 35 rigs the previous week
  • Haynesville stayed flat at 27 rigs

Oklahoma E&Ps Announce Results

Two operators in Oklahoma announced results from their activity and provided updates on future plans:

  • Devon Energy (NYSE: DVN) saw strong results from their vertical refrac program, re-stimulating 50 wells during the quarter in the Barnett, costing around $300,000 per well.
  • Chesapeake Energy (NYSE: CHK) is currently running 7 rigs in the Eagle Ford and is planning to drop to 3 rigs by the end of Q2’15.

Less Volatility Due to International Demand?

For the first time in 2015, the implied volatility for crude oil decreased. The reduced price volatility may be due to the changes of US oil production, international demand, and/or geopolitical uncertainty. The volatility is still almost double from around the same time last year, but has markedly dropped in the last month.

energent-eia-uncertainty_fig5

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