Posted on 01/05/2015 12:26:49 PM PST by thackney
The number of rigs operating in the United States declined by 29 last week to 1,811, marking the fourth consecutive weekly decrease for the U.S. count, published by oil field services company Baker Hughes.
Texas, which has more rigs than any other state, also experienced the biggest drop, from 852 to 840.
The latest figures combine with last week’s decline of 35 to mark the largest two-week drop in the U.S. rig count since 2009.
The North American rig count was down 77 for the week to 2,019 rigs, according to the study.
The declines come at a time when oil prices continue to plummet. West Texas Intermediate, the U.S. benchmark price, briefly fell below $50 per barrel Monday — its lowest since April 2009.
On Monday afternoon, crude was trading at $50.36, less than half of its 2014 peak of $107.26 per barrel in June.
The shrinking rig count comes at a time when a slew of exploration and production companies, among them Marathon Oil, Linn Energy and Continental Resources, have said they plan on pairing back spending in 2015 in response to falling commodity prices.
Jamie Webster, senior director of global oil markets at IHS, said U.S. shale drillers aren’t going to stop drilling altogether — but they’ll be more selective about the wells they drill as oil prices fall.
“It’s not like everybody just decides ‘I’m not going to drill,’” Webster said. “You’ll focus on the sweet spots. Anything you think might be marginal, you’re obviously not going to go for.”
TEXAS DRILLING PERMITS FALL IN NOVEMBER AND OCTOBER
December 29, 2014
The Texas Railroad Commission issued a total of 1,508 original drilling permits in November compared to 1,559 in November 2013. The November total included 1,376 permits to drill new oil and gas wells, 23 to re-enter existing wellbores, and 109 for recompletions. Permits issued in November included 376 oil, 76 gas, 977 oil and gas, 69 injection, two service, and eight other permits.
Texas preliminary October crude oil production averaged 2,215,355 barrels daily, up from the 1,758,780 barrels daily average of October 2013. The preliminary Texas crude oil production figure for October is 68,675,991 barrels, up from 54,522,194 barrels reported during October 2013.
In November, operators reported 1,570 oil, 380 gas, 36 injection and five other completions compared to 1,625 oil, 167 gas, 84 injection and three other completions in November 2013.
Total well completions for 2014 year to date are 27,595 up from 23,311 recorded during the same period in 2013.
Operators reported 1,069 holes plugged and zero dry holes in November compared to 431 holes plugged and zero dry holes in November 2013.
Texas oil and gas wells produced 610,601,042 Mcf (thousand cubic feet) of gas based upon preliminary production figures for October up from the October 2013 preliminary gas production total of 576,413,317 Mcf. Texas preliminary October total gas production averaged 19,696,808 Mcf (thousand cubic feet) a day.
Texas production in October came from 162,224 oil wells and 89,802 gas wells.
Thanks a LOT Obama.
Look at the production numbers....they’re UP...if I’m reading this right.
Production is going to continue to climb while the growth rate is going to slow.
How much it will slow, and if it will slow until the point of falling depends on oil price, how low and for how long.
Wow, looks like there was a big drop in the Rig Count around 2009.
I wonder what happened to cause that? /sarcasm
I will give you a hint, it was NOT the price of crude oil.
In summer 2008, there were about 2,000 drilling rigs operating in the US.
80% of them were chasing Natural Gas.
A year later, Total less than half, ~75% chasing Natural Gas.
When it got back up to 2,000 rigs in late 2011, ~40% were chasing gas while the majority were now chasing oil.
This past summer while oil prices were high, it was over 80% chasing oil. Still over 80% today.
North America Rotary Rig Count (Jan 2000 - Current)
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTY1NDMwfENoaWxkSUQ9MjY1NjM1fFR5cGU9MQ==&t=1
The industry will survive like all the times before.
What we must NOT do, is believe we need the government to “help”.
Noble Energy built a big building and parking garage in NW Harris County, Texas and will move all the employees there. It will be a shame if they can’t fill it up.
I suspect it is much smaller than ExxonMobil’s new campus a little more to the north.
http://fuelfix.com/blog/2013/04/21/aerial-photos-of-the-exxon-mobil-campus/
In total, the complex will house 10,000 people when it opens in 2015.
I laid down 18 rigs in less than 30 days during August and September of 1982. Some drilled to casing point and stopped and some just stopped and plugged. Those were miserable days and there have been a lot more since then. A lot of kids have gotten suckered away from potentially decent careers with larger stable companies to smaller ones that just won’t make it through this. I feel sorry for them but lessons have a price. Some will have made a bit of gain but most will not.
This has gotten silly. A 1% or so out of balance excess and more than a 50% drop in price? Absurd. I have been astounded since the first test trade of futures in October of 1984 that the largest industry in the world has allowed themselves to become no better off than farmers as commodity price takers. I expected back then that somehow the industry would shut down NYMEX or buy them out.
And still people complain that the price of gasoline is too high. As an insider even I was shocked when I drove past the station today and saw 1.68 a gallon. My almost instant reaction was, “That’s too cheap. I should fill my tank before it goes back up.” I recall in ‘98 that at some point there was a sudden reduction in motor fuel stocks because it got so cheap everybody got greedy and started keeping their tank full to the brim. I can’t recall how much was moved from commercial storage to gasoline tanks but it was a lot.
Just playing with numbers...
250 million US vehicles.
http://www.latimes.com/business/autos/la-fi-hy-ihs-automotive-average-age-car-20140609-story.html
Say an average of 18 gallon gasoline tank. No idea if that is close to average, but I would guess between 15 and 20.
About 100 million barrels of fuel storage capacity in vehicles. If the average moved from 40% to 80%, an additional 40 million barrels from “stocks” to users.
That is more than half the gasoline refinery stocks in the US, almost half of the refinery and ULSD refinery stocks.
http://www.eia.gov/dnav/pet/pet_stoc_ref_dc_nus_mbbl_m.htm
It could make a difference.
I can’t recall the month it took place but an IEA report showed up with a huge drawdown and nobody could explain it. I did similar math and figured that is what it was.
I had a CEO once who thought that aging invoices was a gift that could keep on giving. That tank filling is a one time thing too but I think it was a contributor to breaking the feeding frenzy in 1999. As I recall it was taking place right about this time of year.
You being in refining would be closer to the consumption patterns than I but this is the doldrums time of year. Nothing short of war is going to influence the kiddies right now. As long as the price bumps up and down a bit they really don’t care what it is unless they think they may lose some money. For every winner there is a loser. It is like they spend all day just screwing each other with monopoly money. I always think of Eddie Murphy, Mortimer and brother and orange juice for some reason. It isn’t funny though. The whole world is messed up by this foolishness and lots of people lose real money and real jobs. What a shame. All just puppets on little strings.
I suspected that hydrofining to strip sulfur from diesel was a contributor to the cost spread and it took place with the ULSD but does it account for as much as a dollar that we are seeing? Thank you EPA. No wonder so much diesel finds more profitable outlets with exports.
I love the smell of red diesel compared to the pansy ULSD stuff and the red just lubricates better it seems. It feels like it burns better for some reason. Best diesel I ever had was from the company refinery at Cyril... almost straight Red Fork condensate. They hardly had to do a thing to it. It was pretty much just jet fuel since that and the rigs were the biggest market for it all. Sold to all the bases in the area. My Pontiac Bonneville Brougham Diesel took a bit to get up to speed but it would run a hole through the wind. Dad got bit by a recluse spider one time and I made it from OKC to Ft. Smith in about 2 hours. If the cops had tried to stop me we’d have had a real pursuit cause they would have had to make me stop. Dad survived but got awful sick.
Exxon has built their own off/on ramps to I45. Right now it’s a mess out there. It’s a mess in lots of areas around Houston. Really booming. Good for some but not good for those on fixed income. Stuff keeps going up. Boars Head balogna at HEB is almost $8 a pound.
The usurper got a twofer manipulating oil prices - taking a swipe at Putin and putting more Americans out of jobs.
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