US Oil Drilling Picks Up Speed

The ascent of the US oil rig count accelerated through mid-June, according to data from oil-field services provider Baker Hughes. The US oil rig count grew by eight in the week ended Jun. 18 to a total of 373, Baker Hughes' data show, its highest point in 14 months. Since bottoming out last summer, the US oil rig count has more than doubled as improving oil prices lure producers back to the drillpad. Most large domestic oil producers have vowed to maintain their commitment toward prioritizing capital discipline and shareholder returns over upstream growth, but their resolve will be increasingly tested as oil prices push toward $75 per barrel and beyond (OD Jun.16'21). The Colorado Denver-Julesburg Basin led the way during the week by adding three rigs -- its biggest week-to-week increase since 2017 -- to bring its total up to nine. Baker Hughes' "Others" category, used as a catch-all for drilling activity outside major shale plays, also added three oil rigs to boost its count to 57. The Permian Basin added one rig during the week to bump its total to 237. In light of the small increase, the Permian continues to be the leader in output growth and currently hosts two-thirds of the remaining active oil rigs in the US (OD Jun.15'21). Both the North Dakota Williston Basin and the Oklahoma Granite Wash also picked up one rig apiece. Meanwhile, the number of active drilling rigs targeting natural gas in the US grew for the first time in six weeks, inching up by one to a total of 97. Week Ended June 18, 2021 Baker Hughes Rotary Rig Count Region Current Wk. Prev. Wk. Year Ago Total US 470 461 266 Land 457 448 255 Inland Waters 0 0 0 Offshore 13 13 11 Gulf of Mexico 13 13 11 Total Canada 117 93 17 US Rigs Exploring for: Current Wk. Prev. Wk. Year Ago Oil 373 365 189 Gas 97 96 75 Unspecified 0 0 2 Basins Current Wk. Prev. Wk. Year Ago Cana Woodford 15 15 5 DJ Niobrara 9 6 5 Eagle Ford 32 33 11 Haynesville 49 49 32 Marcellus 27 28 27 Permian 237 236 132 Williston (Bakken) 17 16 10 Source: Baker Hughes