A week after beginning the year with its largest decline in months, the US drilling rig count dropped 14 units to 650 during the week ended Jan. 15, according to data from Baker Hughes Inc. The total remains the lowest since Aug. 20, 1999, and down 1,026 year-over-year. With losses in 19 of the last 21 weeks and the absence of an increase since Aug. 14, 2015, an end to the downward spiral appears distant, an inclination validated by Raymond James & Associates indicated last week. The financial services firm projected the overall US count to lose an additional 150 units during the first half of this year, bottoming out at 550 in June before a modest recovery in the second half. Unlike in most weeks during the protracted industry downturn, natural gas-directed rigs represented a bulk of the declines, decreasing 13 units to 135, down 175 year-over-year. Last week, gas-directed rigs posted a 14-unit drop as part of the overall US count’s 34-unit dive. BHP Billiton Ltd. said this week that it plans to reduce its operated rigs onshore US from 7 to 5 in the first quarter following a pretax writedown of $7.2 billion on its US onshore assets (OGJ Online, Jan. 15, 2016). The company operated 26 rigs onshore US only a year ago.
In July 2015, BHP wrote down $2.8 billion pretax in US onshore assets, primarily in the gas-focused Hawkville field of the Eagle Ford. Oil-directed rigs, down 20 last week, edged down 1 unit this week to 515, down 851 year-over-year and their new lowest total since Apr. 30, 2010.
Land rigs fell 12 units to 623, down 987 year-over-year. Rigs engaged in horizontal drilling dropped 8 units to 511, down 742 year-over-year and their lowest level since Nov. 6, 2009. Directional drilling rigs lost 2 units to 62.