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Tuesday, November 29, 2011
The U.S. land rig count surge is starting to flag a bit. While the 4Q to date is the highest quarterly average since 3Q 2008, the early November tallies are down sharply from October’s, according to The Land Rig Newsletter’s Biweekly Report. The average this month (as of November 18) represents a drop of 27 from the October average. Interestingly, the decline happened almost entirely on the oil rig side—counter to the trend seen all year. Leading the slide was Texas, which dropped 10 Traditional (>5,000 ft) oil rigs sequentially from October’s total average. Since the oil-focused unconventional plays have held up well, the likely culprits are small, private operators in conventional Texas plays spending down their budgets before yearend. Further supporting that thesis: The month-to-month rig count decline for this group was 49, by far the biggest among the categories and more than offsetting gains by other groups, according to the Biweekly Report. Taking a sneak peek at the rig count for the week ended November 25, the total tally fell another 16.
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Biweekly Report
Category: U.S. Land Industry Review
Tags:
Unconventional Drilling
Rig Count
Oil-Directed Drilling
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Tuesday, November 22, 2011
Expect a big uptick in the liquids-rich Niobrara play, says The Unconventional Drilling Report. By 4Q 2013, Noble is likely to have 10 Niobrara horizontal rigs active in the DJ Basin’s Wattenberg field vs. 5 today, and Anadarko expects to have 7 Niobrara horizontal rigs running in the field by yearend 2012 vs. 4 at present. Only one Niobrara rig is active in Wyoming’s Powder River Basin, in Goshen County, although Niobrara activity has also occurred in Laramie and Platte counties. About 200 permits have been issued in the three Wyoming counties. Anadarko will probe Niobrara potential in the DJ outside Wattenberg and in the PRB, and Noble will target Niobrara pay in southeastern Wyoming. Chesapeake will jump its rig count in the two basins from 10 to 20 by yearend 2012. Next year will prove the tipping point on whether the Niobrara has Eagle Ford breakout potential. The Niobrara has been slow to firm up in Wyoming, where the geology is more complex. But, overall, healthy growth is likely in the Niobrara rig count over the next several years.
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Posted by:
The Unconventional Drilling Report
Category: U.S. Land Industry Review
Tags:
Permit Activity
Powder River Basin
Chesapeake
Horizontal Drilling
Anadarko
Niobrara
DJ Basin
Eagle Ford Shale
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Tuesday, November 15, 2011
Drilling activity is increasingly concentrated among the larger fleets, according to The Land Rig Newsletter’s latest Biweekly Report. The number of operators running 10 rigs or more is the biggest in recent memory at 42. For the past year or so, that tally has generally been in a range of 32–35. As a group, the ≥10-rig operators are nearing a 60% market share and now stand almost 7 percentage points higher YOY. The average number of rigs run by this group also is higher, at 26, compared with 25 this time a year ago. Bear in mind that certain companies that used to be stalwarts in this category, such as Petrohawk, XTO, and Atlas, no longer exist. This increasing concentration of active rigs in the bigger fleets reflects the relentlessly expanding role of unconventional plays, where the midsize and larger, mostly public, companies focus their efforts. If these plays are also attracting the credit that otherwise still seems tight for small, private operators—which could help account for that group’s dwindling market share.
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Biweekly Report
Category: U.S. Land Industry Review
Tags:
Petrohawk
Unconventional Drilling
XTO Energy
Atlas
Drilling Actiivity
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Tuesday, November 08, 2011
The October Land Rig Newsletter took note of announcements by three big drillers to retire or sell a combined 157 rigs this year. The LRNL team thinks this is the beginning of a trend among larger drillers to focus almost exclusively on unconventional plays. In the latest issue of companion publication The Unconventional Drilling Report, the LRNL team itemized this trend as of October 28, 2011: The top 15 drillers, accounting for 71% of the total U.S. rig count, ran 75% of all the rigs in the unconventional plays for the period. And unconventional plays absorbed 85% of their combined overall active fleets. Generally, among big drillers, those with the lowest ratios of active unconventional rig counts relative to total reported fleet were those reporting major rig retirements. The LRNL team expects more rig retirements to come as larger drillers—especially public ones trying to burnish their unconventional credentials for investors—shed whatever small, mechanical rigs they can and leave conventional drilling increasingly to the smaller drillers.
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Posted by:
The Land Rig Newsletter
Category: U.S. Land Industry Review
Tags:
Unconventional Drilling
Rig Count
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Tuesday, November 01, 2011
How much of a drag will the gas drilling slump be on the overall rig count? While the tally of total U.S. land rigs trended up nicely in October, that followed a 2-month period where it largely stalled out. Overall, the 3Q 2011 rig count tracked the 2Q 2011 tally, each of which registered growth of about 6% sequentially, according to The Land Rig Newsletter’s Biweekly Report. But all of the substantive 3Q growth occurred in July. Using end-July as a starting point, successive rig count increases in August and September were ≤0.5%. That harks back to 1Q 2011, when the rig count actually fell 1.6% sequentially. It’s no coincidence that that occurred when the gas rig share of the rig count fell below 50% for the first time in the modern era, contends The Land Rig Newsletter team. They estimate that the conventional and unconventional plays today account for only about a third of the total U.S. land rig count—and that share is likely to shrink further in 2012.
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Biweekly Report
Category: U.S. Land Industry Review
Tags:
Natural Gas
Rig Count
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Monday, October 24, 2011
With the latest flurry of E&P deals (Statoil-Brigham, Kinder Morgan’s impending sale of El Paso E&P)—and still more to come—what might be the impacts of M&A action would be to unconventional drilling? The Unconventional Drilling Report compared rig counts pre- and post-deals for other recent E&P deals focused primarily on unconventional plays and concluded: Not much. ExxonMobil’s U.S. land rig count has scarcely budged since it acquired XTO, averaging 68 vs. their pre-acquisition tallies of 7 and 64, respectively. Post-acquisition Chevron has averaged 20 rigs since closing on Atlas vs. their respective pre-deal averages of 8 and 7. BHP has averaged 25 after closing on Petrohawk vs. pre-deal average tallies of 2 and 18, respectively. The biggest post-deal traction for bolstering rig counts has come not from outright acquisitions but from joint venture deals, namely Chesapeake’s, whose rig count jumped from a pre-JV 120 to an average 140 since the last JV closed (and recently peaked at 154). It will climb still further after an imminent JV closes on Chesapeake’s Utica Shale acreage.
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Posted by:
The Unconventional Drilling Report
Category: U.S. Land Industry Review
Tags:
Kinder Morgan
Petrohawk
Unconventional Drilling
BHP Billiton
Chevron
El Paso E&P
Chesapeake
ExxonMobil
XTO Energy
Statoil
Utica Shale
Rig Count
Atlas