US Land Rigs Down -2.7%, Bakken Pace Slowing
The Baker Hughes US Rig Count for Land Rigs declined -2.7% this week to 1557 from 1599. The horizontal rig count dropped to 1223 down -24 from last week.
Vertical Rigs Continue to Drop
The vertical rigs operating onshore are now down to 334, including the directional rigs. In January of 2014, there were 530 vertical rigs compared to this week’s number of 334 that is -37% decline in activity. Texas was hit hard, going from 310 last year to 186 a -40% decline. California has dropped -60% of the vertical rigs in the same time period, 29 to 12 currently. Similarly, Utah decreased -50%.
US Land Rigs Down to 1599, -2.7%
The image below shows the weekly comparison and breakdown for wellbore profile and well type.
Chart 1: Permian Basin Rig Count (source: BHI Rig Count, Energent Group)
The top five basins dropped -27 rigs, a -2.7% decline from the previous week:
- Permian down -1.2%
- Eagle Ford down -2.2%
- Williston down -7.3%
- Marcellus up +1.3%
- Mississippian down -7.4%
Trouble in Bakken
According to Lynn Helms, NDIC Department of Mineral Resources, expect the Bakken pace of activity to slow:
The drillers far outpaced completion crews in November. At the end of November there were about 775 wells waiting on completion services, an increase of 125. Rig count in the Williston Basin is falling rapidly. Utilization rate for rigs capable of 20,000+ feet is currently about 80%, and for shallow well rigs (7,000 feet or less) about 50%.
The utilization of Bakken rigs will continue to decline the next several months. We expect to see other significant operators pull rigs and cancel contracts in February and March based on the current oil prices.
Continental Resources, for example, will go from 18 rigs currently to 10 rigs for the remainder of 2015 in March.
Comstock Pausing Eagle Ford Activity
For Comstock Resources, Haynesville will get more attention and money in 2015. 52% of Comstock’s capex is attributed to the Haynesville shale. Their Eagle Ford assets new drilling will be limited to 5 wells for 2015 while Haynesville program expects 14 gross wells. In addition to the new wells, Comstock will refrac 10 existing wells in 2015.
The new well design for Haynesville includes extending lateral length to 7,500 feet, 3x the proppant per cluster, and an unrestricted choke resulting in total EUR of 14-16 Bcf. The old well design results were 5.5-6.0 Bcf total EUR.
Comstock will dedicate $105 million to Eagle Ford completions and infrastructure, 34% of the capital expenditures.
Want more information about how this impacts your business? Contact us to learn about your customers’ drilling & completion activity, basin/play break-even points, and operator financial outlook.