According to data provider Enverus, the US oil and gas rig count both slumped this week as operators remain cautious amid uncertain demand outlooks.
In the week ended August 5, the US oil and gas rig count inched down by 3 to 285 as the Permian counts returned to the lows in early July. The oil rig count slipped by 4 to 198, marking the first reading below 200 since early July while the gas rig ticked up by 1 to 87 from last week.
The West Texas Permian Basin noted 7 rigs idled for an active total of 131. The Bakken basin only shed 1 rig to 11. Likewise, the Marcellus shale basin also shut 1 rig to 25 active rigs. On the contrary, most other basins in the country added new rigs. The Denver-Julesburg, Utica, and Eagle Ford basins each added 1 active rig to 6, 8, and 11, respectively. Rig counts in the Haynesville basin and SCOOP-STACK play were steady for the third week, each at 33 and 11.
The count of drilled but uncompleted (DUC) wells went up by 35 to 7,659 in June. According to the latest US Energy Information Administration Drilling Productivity Report, the biggest rise was posted in the Permian by 49 new DUC to a total of 3,488.
Permian basin operators have so far signaled their anxiety over the volatile demand outlook in ramping up drilling activity.
Diamondback Energy chose maintenance over developing new wells in the second half of this year after turning to no wells into production in June. Concho Resources cut the estimate of average active rig count to 8 from 11 in the second quarter.
Most analysts now believe that the industry rig count has reached the bottom as it was the lowest rig count on record. Despite posting the second week of slump in rig counts, the nationwide total was still higher by 6 from the most recent lowest in the week to July 8.
Going forward, most analysts have expressed their optimism that there will still be the need to drill, produce and transport, as well as cleaning everything up along the way in the basins as oil prices are expected to go up well by mid-2021.
Some analysts predicted operators to make the best out of the relatively higher oil prices and the large DUC inventory to raise well completions.
