North America Goes Back to Losing Rigs

North America dropped 17 rigs week on week, according to Baker Hughes’ latest North America rotary rig count, which was released on May 23.

The total U.S. rig count dropped by 10 and the total Canada rig count dropped by seven week on week, taking the total North America rig count down to 680, comprising 566 rigs from the U.S. and 114 rigs from Canada, the count outlined.

Of the total U.S. rig count of 566, 553 rigs are categorized as land rigs, 11 are categorized as offshore rigs, and two are categorized as inland water rigs. The total U.S. rig count is made up of 465 oil rigs, 98 gas rigs, and three miscellaneous rigs, according to Baker Hughes’ count, which revealed that the U.S. total comprises 511 horizontal rigs, 42 directional rigs, and 13 vertical rigs.

Week on week, the U.S. offshore and inland water rig counts remained unchanged, and the country’s offshore rig count dropped by 10, the count highlighted. The U.S. oil rig count dropped by eight, its gas rig count dropped by two, and its miscellaneous rig count remained unchanged, week on week, the count showed. The U.S. horizontal rig count dropped by nine week on week, its vertical rig count dropped by two, and its directional rig count increased by one, the count revealed.

A major state variances subcategory included in the rig count showed that, week on week, Texas dropped five rigs, Oklahoma, North Dakota, and New Mexico each dropped two rigs, and Pennsylvania and Utah each dropped one rig. Ohio added two rigs and Wyoming added one rig, the count highlighted.

A major basin variances subcategory included in Baker Hughes’ rig count showed that, week on week, the Eagle Ford basin dropped four rigs, the Permian basin dropped three rigs, the Williston basin dropped two rigs, and the Marcellus, Cana Woodford, Arkoma Woodford, and Ardmore Woodford basins each dropped one rig. The Utica basin was shown to have added two rigs week on week.

Canada’s total rig count of 114 is made up of 71 oil rigs and 43 gas rigs, Baker Hughes pointed out. The country’s gas rig count dropped by four week on week and its oil rig count dropped by three during the period, the count revealed.

The total North America rig count is down by 40 rigs compared to year ago levels, according to Baker Hughes’ count, which showed that the U.S. has cut 34 rigs and Canada has cut six rigs, year on year. The U.S. has dropped 32 oil rigs, one gas rig, and one miscellaneous rig, while Canada has dropped 13 gas rigs, and added seven oil rigs, year on year, the count outlined.

In a research note sent to Rigzone on Friday by the JPM Commodities Research team, analysts at J.P. Morgan noted that “total U.S. oil and gas rigs decreased by … 10 this week, according to Baker Hughes”.

“Oil focused rigs decreased by eight to 465 rigs, after losing just one rig last week. Natural gas focused rigs decreased by two to 98 rigs, following losing one rig week over week last week,” they added.

“The rig count in the five major tight oil basins – we use the EIA basin definition – decreased by ten to 434 rigs. The rig count in two major tight gas basins increased by one rig,” they went on to state.

In the research note, the J.P. Morgan analysts pointed out that “the current oil rig count in the U.S. stands at 465, down from 497 from year ago” and highlighted that this was “the lowest level since November 2021”.

“The largest losses occurred in the Permian basin, where the number of oil rigs decreased by 34. The Bakken and Eagle Ford basins lost four and seven rigs, respectively, compared to a year ago,” the analysts stated.

“The Permian Basin has continued to lose rigs since March 7th, while for the Bakken, this marks the first drop since March 21. This decline underscores how rig activity is still reacting to prior price volatility, with WTI prices having slid below $60 in recent weeks,” they added.

“The decline is likely driven mostly by private operators, who tend to respond more quickly to price swings, especially in regions like the Permian,” they continued.

“The rig count across major gas basins increased by one with Marcellus/Utica adding one rig while count in Haynesville remained unchanged at 36 rigs,” the analysts went on to state.

Rigzone has contacted the American Petroleum Institute (API) for comment on J.P. Morgan’s research note. At the time of writing, the API has not responded to Rigzone.

In its previous rig count, which was released on May 16, Baker Hughes showed that North America added five rigs week on week. Although the U.S. dropped a total of two rigs week on week, Canada added a total of seven rigs during the same period, that count outlined.

Baker Hughes’ May 9 rig count showed that North America cut 12 rigs week on week, its May 2 count revealed that North America dropped 11 rigs week on week, its April 25 count revealed that North America dropped four rigs week on week, its April 17 count revealed that North America dropped two rigs week on week, and its April 11 rig count revealed that North America cut 22 rigs week on week.

The company’s April 4 rig count showed that North America cut 12 rigs week on week, its March 28 count revealed that North America cut 18 rigs week on week, and its March 21 rig count also revealed that North America cut 18 rigs week on week. Baker Hughes’ March 14 count showed that North America dropped 35 rigs week on week and its March 7 rig count revealed North America cut 15 rigs week on week.

In its February 28 rig count, Baker Hughes showed that North America added five rigs week on week. Its February 21 count revealed that North America added three rigs week on week, its February 14 rig count showed that North America dropped two rigs week on week, and its January 31 rig count showed that North America added 19 rigs week on week.

The company’s January 24 rig count revealed that North America added 12 rigs week on week, its January 17 count showed that North America added nine rigs week on week, and its January 10 rig count outlined that North America added 117 rigs week on week.

Baker Hughes’ January 3 rig count revealed that North America dropped one rig week on week and its December 27 rig count showed that North America dropped 71 rigs week on week.

Baker Hughes, which has issued rotary rig counts since 1944, describes the figures as an important business barometer for the drilling industry and its suppliers. The company notes that working rig location information is provided in part by Enverus.

To contact the author, email andreas.exarheas@rigzone.com