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Weekly Rig Count : Operators Drop 20 Rigs, Largest in 12 Months

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   |    Friday,April 26,2019

Baker Hughes is reporting that US drillers dropped 20 rigs this week, culminating in a total lost of 84 rigs YTD.   The Permian and Anadarko Basin are the biggest losers.   The Anadakro Basin lost 25% of rigs vs last year. 

In January we forecast that we will lose between ~100 rigs in 2019.   The 2nd largest drilling contractor said this week it expects rig count decline to bottom at the end of Q2 2019.

Lowest since April of 2018.

The chart above shows that we have not seen this level of decline since last year.

Who are the companies dropping rigs?

The chart above shows the companies that have dropped the most rigs.  Sanchez has dropped 6 of its 8 rigs, the company was also delisted.  Another one is Alta Mesa who have reported tapped its entire credit line, (a tactic normally done by companies before they file bankruptcy).

Who is increasing activity this year?

On the other side of those dropping rigs are those companies that have been busy increasing their rig count.

Exxon has added +24 rigs so far this year

BPX Energy (BP Lower 48 + Acquired BHP Assets) have ramped up as well, MDC Texas Operator and Birch amoung others.

2019 vs 2018 Capital Spending.

Based on data we track from 90+ public E&Ps, drilling & completion capital spending is expected to be down -11% year over year.   Operators are seeking to do more with less and as result, year over year drilling and completion activity (wells drilled, wells frac'd) are expected to do down 8%.

Completion Forecast by Region  2019

• Permian frac/completion activity will be up +3%
• Anadarko Basin frac/completion activity will be down -22%
• Eagle Ford  frac / completion activity will be down -6%