Rig data provider Enverus said that the US oil and gas rig counts rose for the first time in four months, signaling the end of the difficult time for the upstream industry.
In the week to July 15, the country’s oil and gas rig count climbed by 9 to 288 units. Oil rigs jumped by 10 to 202 units while the natural gas rigs dropped by 1 to 86.
Across almost of US large basins, oil rigs went up but in the biggest Permian basin, the fell by 2. Likewise, the Utica Shale also posted a drop by 2 units to 7.
Each of the Eagle Ford Shale of South Texas and the SCOOP/STACK play of Oklahoma gained two rigs, making the totals of 12 and 10, respectively. The Williston Basin of North Dakota/Montana rose to 12 rigs, the Haynesville Shale of East Texas/Northwest Louisiana soared to 34 rigs, and the Marcellus Basin mostly in Pennsylvania to 28 rigs by gaining one rig each.
The persisted rig count decline in the Permian is likely due to the expiring rig contracts. Most of the other major oil basins have apparently stabilized and halted decreases.
Regarding the natural gas rigs, some analysts opined that in the coming months, the count might be insufficient to keep production as even the current level is below the level that could sustain production.
Unconventional wells which comprised the bulk of the country’s new drilling, have high decrease rates and to maintain production, need constant drilling and completions.
Meanwhile, the recovery in hydraulic fracturing crews (frac crews) has paused and would likely only pick up to bring the drilled but uncompleted (DUC) wells online in the second half of this year.
Analyst Bill Featherston of Credit Suisse commented, “Frac crews completion activity should begin to recover in Q3 2020."
Crew totals have been going back and forth between 60 and 80 units since late last month.
The recent change from months of a steady drip of rig removals from US fields came right before the second-quarter upstream conference calls scheduled next week. Analysts predicted the calls to focus on second-half outlooks for production and activity, also preliminary glimpses into 2021 plans and spending.
