Rig Count Trends for 2015

Rig Count Trends for 2015

As the Baker Hughes (NYSE: BHI) rig count continues its downward trend from the end of 2014, we look forward to the activity in 2015. Many operators are continuing to prepare for the worst in 2015 and many are front-loading activity to the first quarter of 2015 and dropping rig counts lower as the year progresses if oil prices don’t improve.

Eagle Ford

According to the BHI historical rig count, activity has declined 32% from the start of 2015, bringing the count to 137 rigs (which is 38% lower than this time last year). Rig counts in the Eagle Ford are anticipated to decline throughout the year, although operators are ready to ramp up activity if they see improvement in commodity prices. An estimated -38% drop in rig counts from the first quarter of 2015 to the fourth quarter is expected based off of operator reports. Anadarko (APC) is estimating 200 new wells being drilled in 2015, while delaying 30 completions to 2016 with about 5 rigs running.


Source: Anadarko company presentations

Another Eagle Ford player, Rosetta Resources (ROSE), is expected to drill 11 new wells while running 2 rigs, having 55 wells still uncompleted in their backlog of wells. They are projecting 20 wells that will be completed this year.


In the Haynesville, there is a different movement, and is expected to have more stability later in 2015. A couple of operators have mentioned utilizing refracs and the testing of refracking wells in order to refine their techniques. One of these operators is Comstock Resources (CRK), which expects to perform 10 refracs in the Haynesville and drill 14 new wells with about 7 rigs running by year’s end. EXCO Resources (XCO) has completed 6 refracs with multiple designs and has a large amount of potential wells in which it can use the new designs. EXCO expects to drill 25 new wells while completing about 17 wells and having 3 rigs by the end of the year.


Source: BHI, Energent Group

Marcellus / Utica

The Marcellus and Utica plays have seen a combined decline of 23% since the start of the year, with the Utica dropping 70% of its oil rigs since the beginning of the year. A subtle decline is expected in the Marcellus and Utica plays, although within the last month gas rig counts have been fairly steady. We expect counts to drop about 15% to 20% based on operator reporting by the end of the year. Top operators like Antero Resources (AR) are expected to delay completions while drilling 160 wells in 2015 (compared to the about 175 in 2014). Antero is keeping rig counts steady throughout the year with 7 in the Marcellus and 7 in the Utica. The same goes for Range Resources, which will be running 2 rigs in the Marcellus in 2015 with 95% of their $870 million budget, and drilling 2 wells in the Utica, and planning more in 2016. 


Within the Bakken, operators have decreased rig counts since the end of 2014 by about 50% compared to the most recent counts. Rig counts will continue to decline as operators wait for improved prices. SM Energy expects to run 9 rigs in the first quarter of 2015, then drop their count to 4 rigs by the end of 2015. Continental Resources expects to run 12 rigs for the rest of 2015 (after the first quarter), drilling about 190 wells. Most operators will have leveled off their rig counts by the end of the first quarter for the rest of 2015 or until prices recover.


Source: Continental Resources company presentations


The DJ Basin rig count is down -44% from the first week of April in 2014, to the current count of 30 rigs as of April 3, 2015, and is down 48% since the start of the year. Operators like Whiting Petroleum (WLL) are planning to drop their rig counts from 6 in the first quarter of 2015 to 4 by the end of 2015. The same goes for Synergy Resources (SYRG), which was running 3 rigs in the DJ Basin in the fourth quarter of 2014 and will be reducing their count to 1 for 2015. Another operator, Encana Corporation (ECA), is expecting to drill about 30-35 wells in 2015 with 3-5 rigs running, compared to the 6 it operated in 2014.


Source: BHI, Energent Group


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