Market Overview

Eagle Ford And Cana Woodford Shale Plays Witness More Oil Rigs


In its weekly release, Baker Hughes BHGE, a GE (NYSE: GE) company, reported an increase in total rig count in the United States.

About the Rig Count

Baker Hughes' data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.

Change in this Houston-based oilfield services player's rotary rig count impacts demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL, Schlumberger Limited SLB, Diamond Offshore Drilling, Inc. DO and Transocean Ltd. RIG.


Weekly Summary: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1008 in the week (ended Apr 13) compared with the prior week's 1003. Notably, total count increased eight times in the last 10 weeks.

Since it slipped to an all-time low of 404 in May 2016, rig count has been rising rapidly in U.S. shale resources. Punctuated by a few pauses, the current nationwide rig count is considerably higher than the prior-year level of 847.

For the week in discussion, the rise in rig count can be attributed to higher offshore and onshore operations. The tally for offshore rigs was recorded at 16 compared with 12. Also, the number of onshore rigs totaled 988, marginally higher than 987.

Four rigs operated in the inland waters last week, in line with the figure reported in the week ended Apr 6.

Oil Rig Count: Oil rig count rose to 815 from 808 for the week ended Apr 6. Moreover, the current tally, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year's 683. The oil rig count rose eight times in the last 10 weeks.

Natural Gas Rig Count: The natural gas rig count of 192 is lower than 194 for the week ended Apr 6.

However, like oil, the count of rigs exploring gas is above the year-ago tally of 162.

Per the recent report, the number of natural gas-directed rigs is 88% below the all-time high of 1,606 achieved in late summer 2008.

Rig Count by Type: The number of vertical drilling rigs of 55 units dropped from 56 units. However, the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) rose by six units to 953 units.

Gulf of Mexico (GoM): The GoM rig count is at 16 units — 15 rigs were oil-directed — higher than the tally of 12 for the week ended Apr 6.


The number of total rigs exploring in the United States has increased, courtesy of the addition of two oil rigs in Cana Woodford shale play and three oil rigs in the Eagle Ford.

The price of West Texas Intermediate (NYSE: WTI) crude is trading above $65 per-barrel-mark, thanks to the intensified middle east tensions. The missile strike in Syria by the United States and allies Britain and France will likely pave the way for America's strong stance against Iran and Russia. Iran and Russia reportedly backed Syria for conducting the suspected chemical attack on Douma people. Hence, there is considerable room for rally in oil prices which could support the persistent ramp up of drilling activities.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Baker Hughes contributor contributorsNews Commodities Markets


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