Posted on 02/09/2009 1:52:48 PM PST by thackney
The US rig count continues to plummet, down 73 with 1,399 rotary rigs still drilling, said Baker Hughes Inc.
That's the lowest activity level since July 19, 2005, when 1,404 rigs were working and the count was climbing. A year ago this week there were 1,755 units at work.
Canada's rig count inched up by 3 units to 435 drilling, down from 598 during the same time last year.
US land drilling dropped 74 rigs to 1,330 working. Inland water activity was down 1 rig to 7. However, US offshore drilling increased by 2 rotary rigs to 61 in the Gulf of Mexico and 62 total in US waters.
As an example of the rapid decline in drilling operations, analysts at Pritchard Capital Partners LLC, New Orleans, earlier reported that Patterson-UTI Energy Inc., one of the largest onshore contract drillers in North America, had 268 rigs working the US and 13 in Canada "near the cycle peak" at the end of September. In December, that fell to 201 active rigs in the US and 12 in Canada. In January, its activity averaged 147 rigs in the US and 15 in Canada.
Analysts said operations have slowed considerably in the Permian basin, the US Mid-continent, South Texas, and the ArkLaTex area.
Meanwhile, Pritchard Capital Partners reported Helmerich & Payne Inc., Tulsa, may be nearing a crisis in its dispute with Petroleos de Venezuela SA (PDVSA) over slow payment on drilling contracts in Venezuela. PDVSA owes $100 million, and the drilling contractor began idling rigs as drilling contracts expire. Helmerich & Payne earlier said it expected 5 of its 11 rigs in Venezuela to be idle by the end of February.
However, Pritchard Capital analysts recently cited news reports that the Venezuelan union Fedpetrol took control of four of the rigs and increased its guard of the other seven rigs. Helmerich & Payne denied that PDVSA or labor unions seized its rigs, but it did say two were affected by union work stoppages.
"The uncertainty is disappointing because the national oil company had said it would begin paying off its debts this week while negotiating lower rates on the rigs," analysts said.
In January Petrosucre, a PDVSA subsidiary, took control of Ensco International Inc.'s ENSCO 69 jack up rig in a similar dispute over nonpayment of invoices on a drilling contract.
The number of rigs drilling for natural gas in the US this week dropped by 46 to 1,104. Drilling for oil fell by 26 rigs to 283. There were 12 rigs unclassified. Horizontal drilling was down 30 rigs to 518 working. Directional drilling declined by 14 rigs to 281.
Texas accounted for most of the latest week's loss, down 50 rigs to 621 still working. Oklahoma dropped 9 rigs to 135. Colorado and Wyoming lost 5 each to 73 and 56, respectively.
New Mexico was down 4 to 53. North Dakota declined 2 to 66. Alaska lost 1, with 9 still drilling, while Arkansas was unchanged at 50. Louisiana increased by 1 rig to 171, and California was up by 2 to 37 working.
This will lead to very high oil prices in a few years.
Doing all they can to drive those prices back up.
Gas heading over $2 a gallon here
Here’s a thought. Buy oil through the USO (ETF) fund. Once this recession/depression has passed, the demand for oil will only go up and up with all the emerging markets. Buy it now while at low prices - I am. Mark this post. I’ll come back in 2 to 3 years and let you know how it worked out.
One of my sons works on a gas drilling rig, one week on and one week off. Each week before leaving he checks in to see if he still has a job, because he WAS working 50-100 miles from home & is now over a 10 hour drive away.
Pay up Hugo you asshole!
We had 2,031 active rigs last September.
North America Rotary Rig Count - Current & Historical Data - See all 13 Tabs in Excel Sheet
http://investor.shareholder.com/common/download/download.cfm?companyid=BHI&fileid=270897&filekey=44834CDA-E494-40C5-8AA0-68207BCA9F8F&filename=US_Rig_Report_020609.xls
It was bad, real bad. ...unless something changes.
Saying 30%-40% gas rigs being idle and not recovering till the end of 4th qtr?
However, if you would like to see the US rig count increase, you will need to pay $3.00 for a gallon of gas.
Here in Texas and Louisiana we are going to Party Like It’s 1987.
There were 45% more rigs running less than 5 month ago.
Granted it was a brief peak, but that was active drilling rigs last September.
I would be very surprised to see us reach that high again anytime this year.
Actually the original song title works.
The yearly average in 1999 was worse than 1987.
Yeah, 1999 was bad, but it was not a shock like in 86 and 87.
And at least in 99 you could go off to some dark corner of the third world and find work.
Most rigs in the US are drilling for natural gas. Prices went from $14.00 per thousand cubic feet at their peak this summer to around $4.00 today. Not too many gas plays are commercial at those prices unless rig rates come down. The only way to drop rig rates is to drop rigs.
I talked to my brother in western ND the other day. He’s part of the oil industry there and said that one area is currently running around 90 rigs, but are expected to be down to only about 15 by April. Not good news for those who are depending on the oil economy there for their livelihood. This will be another casualty of the Obama administration.
Operators are waiting on new oil pipelines into the area (Parshall Field.) Much of the oil is being trucked as far away as Minnesota and Oklahoma.
Don't even joke like that.
Hard to sell equipment when so many 'spares' are in the yard.
Many had the bumper sticker praying for another boom and promising not to p!ss it away this time.
Few would have though it would be over so soon. All to many find themselves in the same old canoe, on the same creek, looking around for a paddle.
I’m in MN, my husband is in the oil industry and you’re right - we get a lot of ND crude that we refine. Last I heard, those pipelines are going nowhere because of the decline in oil prices. My information could be wrong, but that’s what I heard.
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