U.S. Land Rig Count Surge Starting to Flag
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.
Category: U.S. Land Industry Review