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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 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
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Tuesday, October 18, 2011
The U.S. land rig count continues to surpass expectations in mid-October, reaching another high for the year and setting a new threshold target for the 4Q: an average exceeding 1,900. The latest total, according to The Land Rig Newsletter’s Biweekly Report, is also the biggest since November 21, 2008. However, the 19-unit increase to 1,884 from the previous Biweekly Report tally was in fact a decline from the 1,907 total for the week ended September 30 (as recorded in The Biweekly Report’s sister publication, The Unconventional Drilling Report, which alternates with The Biweekly Report). That puts the average tally for the preceding 2 weeks to 1,896, a hefty gain over the 3Q average of 1,852 that in turn was a big jump from the 2Q average of 1,750. All the action was in the Traditional (>5,000 feet) count, up 18 vs. the last Biweekly Report, as gains in Texas (+24) and Oklahoma (+8) and Colorado (+8) more than offset substantial drops in North Dakota (-13) and Wyoming (-7).
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Biweekly Report
Category: U.S. Land Industry Review
Tags:
Rig Count
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Tuesday, September 27, 2011
You can’t overestimate the importance of unconventional plays not only to U.S. drilling and production but also to America’s energy picture. Even as robust oil prices have buoyed U.S. conventional drilling, unconventional rigs have managed to eke out a small gain in market share to 70.7% in 3Q 2011 to date from 69.5% a year ago, according to The Unconventional Drilling Report. It’s clear that unconventional liquids rigs (+48% YOY) are the main driver of the 20% YOY increase in total rig count. Meanwhile, production gains from unconventional drilling have enabled the U.S. to reverse a long decline in U.S. oil and gas output. U.S. crude oil production fell every year since 1985 until 2009’s uptick of 8%, followed by another 2% in 2010. By 2012, EIA estimates total U.S. petroleum liquids production will have risen by more than 1 million barrels per day from 2009. Even with a steep drop in Gulf of Mexico output, EIA predicts U.S. gas production will grow by 4 Bcfd (6.4%) this year and another 1.1 Bcfd in 2012.
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Posted by:
The Unconventional Drilling Report
Category: U.S. Land Industry Review
Tags:
Unconventional Gas
Unconventional Drilling
Unconventional Oil
Rig Count