Drilling activity continued to slump during the final week of May, led by a decline in Texas activity. Drilling is also being undercut by uncertain commodity prices and oil and gas producers’ continued focus on returning cash to shareholders rather than drilling new wells.
Oilfield services firm Baker Hughes said Friday the US rig count it has issued weekly since 1944 sank 15 rigs to 696 rigs, the lowest level since April 2022 and the fifth consecutive weekly decline. The count is now 31 rigs or 4% below the 727 reported last year.
The number of rigs drilling for crude oil fell 15 – the most since September 2021 – to 555, 19 fewer than the 574 drilling for oil a year ago. The oil rig count fell for a sixth consecutive month in May. The number of rigs drilling for natural gas was unchanged at 137, 14 more than the 151 reported last year. The number of rigs drilling for natural gas posted the biggest monthly decline in May since 2016.
Texas had 353 rigs at work statewide, down six for the week and four less than the 357 rigs active across the state last year. New Mexico dropped one rig to 107. Louisiana (2), North Dakota (1), Oklahoma (3) and Wyoming (1) joined Texas and New Mexico as producing states to see declines. No producing state saw an increase for the week.
The Permian Basin rig count fell by two to 348, still six more than the 342 rigs deployed across the region a year ago.
Eddy County, New Mexico, remains the most active county in the Permian with 56 rigs, up two for the week. Lea County, New Mexico, followed with 50 rigs, down three.
Martin County reported 41 rigs, down one. Reeves County had 35 rigs, down one for the week. Midland County had 31 rigs at work within county lines for a second week while Loving County reported 26, down one. Ward County added a rig for 18. Reagan and Upton counties each reported 14 rigs for a second week. Andrews County gained two rigs for 13.
Enverus Foundation, part of the energy-focused Software as a Service firm Enverus, said its US rig count reached as high as 759 during the week ended May 31, a decline of eight rigs from the previous week’s peak. The count is down 4%, or 33 rigs, in the last month and down 7% year over year.
Among major plays, Enverus said the Gulf Coast and Permian fell the most in the last week. The Gulf Coast dropped five rigs to 81, and the Permian slid by four to 331. The DJ and Anadarko basins fell by one rig each to 16 and 59. The Williston was flat at 37 rigs, while Appalachia added one rig at 55 running.
Compared to this time last year, the Gulf Coast has lost the most rigs at 23. The only other basin with a double-digit decline is the Anadarko, which is down by 11 year over year. The Permian, whose peak in the last 12 months was 348 rigs in early April, is still up by 11 rigs compared to the end of May 2022.
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