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What is the rig count? The More You Know!

01/26/2018 10:05 AM | Anonymous member (Administrator)

Baker Hughes Rig Count: U.S. +11 to 947 rigs

U.S. Rig Count is up 11 rigs from last week to 947, with oil rigs up 12 to 759, gas rigs down 1 to 188, and miscellaneous rigs unchanged.

U.S. Rig Count is up 235 rigs from last year's count of 712, with oil rigs up 193, gas rigs up 43, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is down 2 rigs at 17 and down 4 rigs year-over-year.


WHAT IS THE RIG COUNT?  The Baker Hughes North American Rotary Rig Count is a weekly census of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States and Canada.


WHAT IS THE HIGHEST AND LOWEST RIG COUNT RECORDED?

Since 1940 the highest weekly US rig count was 4,530 recorded on December 28, 1981. The lowest U.S. rig count was recorded in 2016. In Canada the highest weekly rig count of 727 was recorded on February 3, 2006. The lowest weekly rotary rig count of 29 was recorded on April 24,1992


WHAT FACTORS INFLUENCE THE RIG COUNT?

Rig count trends are governed by oil company exploration and development spending, which in turn is influenced by the current and expected price of oil and natural gas. Rig counts therefore reflect the strength and stability of energy prices. However, there are many other factors at work, including:

Technology:

  • Minimizes the number of wells required to develop a reservoir
  • Maximizes production from new and existing fields
  • Increases the operational efficiency of the active drilling fleet
  • Opens new frontiers for exploration (such as deepwater areas)

Weather:

  • Interferes with the logistics of drilling schedules.
  • Seasonal weather patterns such as the Spring thaw in Canada can have a profound impact on activity, with soft, wet ground making it difficult to move rigs and set up new sites.
  • Severe weather such as hurricanes can impact the rig count by forcing the evacuation of personnel from offshore platforms and delaying rig moves to new locations.

Seasonal spending patterns:

  • Rig counts rise and fall with company budgeting and spending cycles
  • U.S. drilling activity often declines in the first quarter as prior year drilling programs expire. Activity then rises for the rest of the year, peaking in December to fulfill drilling commitments before budgets and leaseholds expire.

Other factors:

  • Local taxation policies
  • Government sanctions
  • Political unrest
  • Development of new infrastructure (such as roads and pipelines)
  • Availability of capital investment

HOW IS THE DETERMINATION BETWEEN DRILLING FOR OIL OR GAS MADE?

The determination is made by the operating company when the rig permit is issued by the state's permitting authority. The operating company will drill appraisal well(s) to determine the hydrocarbon target. Based on the results, the operator makes a judgment call on how to classify the well. For example, if a well is producing – on a Btu basis – 50% gas; 20% NGLs and 30% oil, it could either be listed as a gas well (gas is the largest component), or an oil well (which is driving the economics). This judgment is solely up to the operator.



The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.


Baker Hughes Rig Counts are published by major newspapers and trade publications, are referred to frequently by journalists, economists, security analysts and government officials, and are included in many industry statistical reports. Because they have been compiled consistently for 70 years, Baker Hughes Rig Counts also are useful in historical analysis of the industry.


Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon central time on the last day of the work week. The international rig count is released on the fifth working day of each month.



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