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Oklahoma Witnesses Addition of 5 Onshore Drilling Rigs

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In its weekly release, Baker Hughes , a 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 - Free Report) , Schlumberger Limited (SLB - Free Report) , Diamond Offshore Drilling, Inc. (DO - Free Report) and Transocean Ltd. (RIG - Free Report) .

Details

Weekly Summary: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1003 in the week (ended Apr 6) — higher than the prior week’s 993. Notably, total count increased six times in the last seven 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 839.

For the week in discussion, the rise in rig count can be attributed to higher onshore operations. The number of onshore rigs totaled 987, higher than 977.

Four rigs operated in the inland waters last week, in line with the week ended Mar 29. The tally for offshore rigs was flat at 12.

Oil Rig Count: Oil rig count rose to 808 from 797 for the week ended Mar 29. The count of rigs exploring oil in the United States never reached the current mark since March 2015. Moreover, the current tally, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year’s 672. The oil rig count rose eight times in the last ten weeks.

Natural Gas Rig Count: The natural gas rig count of 194 was the same as the count for the week ended Mar 29. With this, the tally increased six times in seven weeks.

Moreover, like oil, the count of rigs exploring gas is above the year-ago tally of 165.

Per the recent report, the number of natural gas-directed rigs is almost 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 56 units declined from 63 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 17 units to 947 units.

Gulf of Mexico (GoM): The GoM rig count is at 12 units — all the rigs were oil-directed — in line with the tally for the week ended Mar 29.

Conclusion

The number of total rigs exploring in the United States increased, courtesy of the addition of five onshore rigs in the Oklahoma state and two onshore rigs in Texas.

Per the U.S. Energy Information Administration (EIA), the average monthly prices of West Texas Intermediate (WTI) crude during January and February of 2018 were recorded at $63.70 per barrel and $62.23 per barrel, respectively. Notably, the average monthly WTI crude price has never touched $60 since 2015. Also, throughout March, the commodity traded above the $60-per-barrel mark. Overall, the crude pricing scenario seems healthy which has opened up room for further ramp up of drilling activities.

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