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Getty Images via Newscred
Getty Images via Newscred

Rig count trends among major U.S. shale plays

The slide in oil prices recently has been causing a noticeable trend with the amount of rigs accounted for among various shale plays throughout the United States. In fact, over the past three weeks, rig counts have seen substantial declines with over 90 rigs being shut down, according to Baker Hughes. Which raises the question. Which of the major shale plays is experiencing the largest disparity in its monthly rig counts? Below is a chart listing the seven major shale plays along with the number of rigs it accounted for over a five-month period from August, 2014 thru December, 2014. Numbers in black represent the starting point in August, while green shows monthly gain and red shows monthly loss. Any numbers in grey color went unchanged from the previous month. The following numbers were taken from shaleexperts.com.

chart

The biggest swing in the number of rigs came from the Permian Basin from October, 2014 to November, 2014 when rigs went up 11 in a month to 567, which is where it currently stands. Marcellus has remained steady at 82 rigs since October, 2014. Bakken peaked in October last year with 198 rigs and is now down 4 to 189 in December. Niobrara also peaked in October, 2014 at 64 rigs, up 3 from its current total of 61. Eagle Ford shale topped out at 212 rigs in November, 2014, up 6 from its current total of 206 rigs.  Utica bucked the recent trend and gained 3 rigs from August with a current total of 48. Haynesville finished the year down 5 rigs from its peak of 45 in September, 2014.

 

135 comments

  1. This generally happens even when prices are high, as was the case in ’09..

    However, the lower rig count shouldn’t be considered as a direct byproduct of the prices.

    Generally once they’ve completed their scheduled drilling operations the next phase is generally to maintain the well, and assign royally interests (they sell interest in each well to other companies to make up for losses) for additional revenue.

    So typically you’ll see a decrease in new drilling following a surge.

    Since we just had a surge, and those wells are scheduled to continue to produce (both oil and gas wells will continue to profit for these next 5-10 years. Longer if they rework the wells.) then you’ll see they decline.

    But it isn’t linked to prices more so than its just how they operate.

    We saw this in the beginning of the Barnett play a few years back. West Teas will be next. And that area was the original surge of exploration nearly a hundred years ago.

    We work in cycles, and these trends are easily mapped.

    No need to link the prices to a phase in exploration that’s seen rig decreases in the past even when prices were over $100/per barrel.

    To link these together is not accurately conveying the information.

    It’s reaching in order to spur an unnecessary concern over the prices.

    We told Congress that in order to drop the price so ppl could afford gas, we would have to temporarily increase production by way of fracking.

    But the normal day to day operations of drilling to capacity then scaling back, is not a product of the prices being low.

    • I think your on the wrong planet buddy

    • It’s you’re. Not your.

      And don’t believe the unsubstantiated articles.

      I’m an RPL and member of the AAPL. This isn’t my opinion. I’ve seen this happen, this is how it works, and no matter what, in ’09 they cut back as well and the prices were high. So it makes no difference whether the prices are up or down. They still cut back no matter what.

      There’s only so much production they can operate at one time. Why continue to drill new wells if they have producing units from the wells they have now?

      • andrew—registered petroleum Landman…. That’s about the equivalent of saying I’m janitor that mops up the operating room so I know about brain surgery!

      • andrew—you understand the business because you’re a registered petroleum Landman…. That’s about the equivalent of saying I’m a janitor that mops up the operating room so I know about brain surgery!

    • Andrew do you work for Obama?

    • Andrew I think your an idiot ! How do you come up with this stupid hootin-nanny? You must work at the third window at McDonald’s !!!

    • I’m in the oil and gas industry as an Independent landman.

      I work for myself. Personal Landman

    • I’ve been doing this since ’98.. Been a few trends through that period. And the same doomsday rhetoric.

    • Jordan Peterson what do you think

    • I’m not about to argue with a guy who has been a landman since I was in elementary school lol. Fact is, a lot of guys are fixin to be let go, regardless of the fact that the market will bounce back.

    • You may not argue but I will. I’m third generation and myself a 18 year directional driller.
      I’ll never claim to know everything but I’ll tell you right now these oil prices are a major significance in energy companies closing shop and stacking rigs.
      I’m shoulder to shoulder with several clients and believe me, projects futures are down to single digit dollar changes now for sum.

    • I’m second generation and they’re still in the business, one of whom works for EOG resources. The other is in New Mexico where there is a boom.

      I think the point is, drilling phases cease eventually in normal cases, and they did so when the prices were high.

      So either way, companies cut, for a variety of reasons, but even still, we end up bouncing back.

      Plus, as a whole, there is more production scheduled in other states, so there will be an increase in jobs in those areas.

      In Texas in may slow, but West Texas and the East are still in big plays.

      While some companies have to cut, it isn’t necessarily a direct link.

      Not if the same thing happened while prices were high.

    • I visit rigs out in west texas with different companies everyday. The POB is a factor in companies especially smaller ones releasing or stacking rigs. Should people be worried? Depends on what you do in the industry and who you work for..

    • Landmen should be worried… lol

    • I’m 3rd generation. Doesn’t make me an expert and I don’t have a crystal ball. You may be right, but that doesn’t change the fact that when rigs stack people lose jobs. I hope you are right and it comes back quickly but I’m sick of laying people off knowing they have a family to feed.

    • It’s all oil prices !!!! We are going to start exporting oil and the Saudis knew this… They are trying to put a huge dent in shale, specifically the EFS… It’s all price ….. We will get a premium for our WTi over crap Brent oil … End this year we will see 100+oil agin due to demand still around 95 barrels a day and a major shortfall… This boom is just getting started lol ….

    • I think Andrew is correct.. we will be just fine..

    • The boom hasn’t stopped, it’s just booming elsewhere. NM and Oklahoma are now leading gas exploration.

      Texas may see cuts but it’s still business as usual in terms of moving on from drilling phases to production.

      Companies are selling WI (working interests) and maintaining the leases on the books. Which they tend to do like every year around this time!

      It’s cyclical and easy to spot every year. Is like clockwork.

      And yes eventually like we saw in the late 90’s the price will stabilize to its fair market value.

      Its happened before, and it’ll happen again.

      In the mean time, reports of there being a drastic repercussion due to these price being low is disengenous. Or negligible reporting.

      When prices were high the same reports were being posted but news agencies.

      It’s the oil companies business practices that affect prices, not the other way around.

      They’re connecting dots that aren’t even on the same page.

    • I want some of what Andrew is smoking. The only reason people are laying down rigs is because of price.

    • If prices were still $85+, they wouldn’t be stacking rigs and canceling drilling programs. It’s pretty simple.

    • If they are laying off now because prices are low, then explain why they laid off when the prices were at $100/barrel five years ago!!! Same reason? That makes no sense. You can’t have it both ways.

      You: when prices are high that’s when they cut

      Me: but prices are low

      You: yup, that’s also why they’re cutting.

      Me: so pretty much they just cut

      You:????

      The price is not the factor. Why would oil companies continue to drill wells when they’ve already saturated the market? Of course they’re cutting.

      Everytime they finish with drilling operations they cut back.

      Of course they over hired to begin with, so they’re not losing profit revenue.

      Again, I’m an RPL and member of the AAPL

      Personal Landman

      I’ve seen this since ’98. If just happens that while it’s happening this time, the prices are low.

      The last time they cut it was high and they said the same.

      That alone shows that cuts are independent of price. Not when production had been inflated to increase supply to begin with.

    • Not to sound callous, but when I started in this business, it was never a guarantee that our jobs would be permanent, not a landmen.

      Even with in-house positions, there’s no guarantee.

      The expectation that jobs are supposed to be long term should be reevaluated.

    • Howlong do you think it will be for south /east texas drilling to pick back up?

    • They last article I read about it said within the next five years.. But that’s a very general prediction.

      But the Eagle Ford is said to still be a boom. But right now it’s all in the Permian.

    • I move rigs in Oklahoma & can tell you they are stacking rigs left & right!!
      The price of oil is to blame, not some imaginary cycle that you talk about!!!

    • I worked Woodward OK just last year. While the rigs were stacking they were still leasing, and assigning interests. Hiring more landmen like my self reworking well to drill deeper. They aren’t abandoning the wells.

      They’re holding off production on some that aren’t producing or will produce in tired future, so they cap it to hold off until they need it, a “shut-in” as its called.

      This is standard operating procedures. (check the American Association of Professional Landman website. I’m a member and Registered. Personal Landman )

      They’re still profiting and making money from producing wells the geologists decide on.

      I’ve been in this for so long, it’s not debatable. This isn’t a theory.

      I’ve worked for oil companies in OK, LA, TX.. and have worked since ’98..

      Whether you believe it or not, it’s still the truth.

      YouTube what they were saying 5 years ago when the price was $100/barrel. That said the price was too high and oil companies would need to lay off and the economy would decline unless we frack more and drill more. Causing the price to drop so we’d be okay. Lol!

      We did exactly that since then.

      AND NOW THEY’RE SAYING THE SAME RHETORIC.

      Which means either the people analyzing this are incompetent or biased.

      But definitely not correct.

    • Andrew, you haven’t the slightest idea what you are talking about.

      Realize that the oil patch is immensely larger than all of the domestic US land production.

      If you don’t think oil companies slash expenses when the price per barrel decreases, you need your head checked.

    • This trend happens constantly . What needs to be done is educate people how to prepare themselves fir the lay off. Because it’s going to happen sometime in a oilfield career. I seen a lot of young men gey nose deep in dept to end up being kicked to the side. I’m done with the oilfield .

    • Joseph, that’s naive thinking.

      If they cut expenses in ’09 when the price was $100/barrel, and they cut now when it’s $50, this only indicates that they cut no matter what.

      How is this difficult? What part don’t you understand?

      This isn’t by theory, every one’s who’s worked in this business long enough has seen this many times before.

      And the same BS talk about it being the reason the companies cut back.

      As if the companies don’t regulate and price their product!

      What’s sad is how little respect you have for not only the people who are actually on the ground floor but those of us who deal with the oil companies on a day to day basis.

      I’ve been doing this 16yrs, registered with the AAPL, second generation with both parents working since the 70’s, one now working for EOG resources, the other in NM where there’s a boom.

      Please only reply if you actually have information to share.

      I’m sharing my knowledge and experience for the benefit of those who may not know how this works.

      And what they report, these connections they are infering, aren’t the reality.

    • All I know is I own right at 100 sand trucks, and we are booked solid all the way thru April. Customers are asking for more trucks. Who this is going to hurt is the small people. Ride it out if you got the money, position yourself for smart buy ins, and when it rebounds you will go twice as big. Just got to be smart about your money. If your eating a 30 steak every night for dinner the last 3 years, chances are you haven’t been smart. Oilfield for life.

    • There was never guaranteed for us this industry that things would be consistent.

      We expect this to happen. Other regions are booming just not the EF.

    • I just rode thru New Mexico, wow. Ive never seen so many wells so close together, that fracking is going nutz.

    • Yeah my father is in Hobbs, they’ve been on a hiring frenzy for Landmen.

    • It was said, that “We told Congress that in order to drop the price so people could afford gas, we would have to temporarily increase production by way of fracking…. My question is when did you (WE) have this freakin conversation? Because gas prices have just recently started going down… Whereas gas prices have been high for more than five years…. The plummeting oil prices have nothing to do with those other OPEC nations (Arab) flooding the market with cheap oil, to compete??

    • We increased production for the last five years, been fracking all over the united states, already had reserves from the ’09 recession, and now have an excess supply so that we don’t have to compete with OPEC. And as we all know in the commodities market, if you have an excess, it becomes cheaper to sell.

      This isn’t new. It’s exactly what was promised. More production will lead to more supply and thus lower cost.

      Its basic economics.

      They flooded the market with production from ’09 forward. And now we’re reaping the benefits.

      There’s no conspiracy, no smoking gun here. This is how the oil industry works.

      It’s how any commodity is marketed.

      If you mine for gold and have an abundance, it’s cheaper to sell.. If you have only a reserve, it’s worth more.

      Pretty much the same with oil.

      We fracksd which allowed for deeper and more extensive drilling, which led to more barrels per day which led to cheaper gas.

      OPEC is only an issue when we export. And we’re about to.

      They were talking about this five years ago.

    • Andrew tamez, I have been reading your responses on several articles related to the recent downturn and while your well spoken you seem to be clueless to the oil and gas industry. When budgets that were made months ago are getting slashed how can you say that it’s not a reflection of price. I think the more you reply on these threads the more you are hurting yourself for potential business down the road. Good day..

    • I’m hurting my business by knowing about my business?

      How can you think the lower prices caused companies to cut when they also cut when prices were high five years ago? That’s not logical.

      The point is, whether you understand the business or not, is that companies always cut after drilling operations.

      Period.

      They determine the market value based on supply and demand.

      I’m sorry this is too difficult for non oil industry ppl to understand.

      I’m speaking from actual experience from a second generation landman whose been doing this since ’98

      I’ve dealt with companies buying and selling their interests in wells.

      I’ve seen this type of cut back and was a victim of it too.

      But I’m not ignorant enough to blame it on the price when it’s simply the nature of these businesses.

      No matter what there are cut backs. Every year, every cycle, every time.

      Happened before and it’ll happen again.

      Those of us not new to this know how to prepare. We don’t expect there to be permanence in this business.

      Sorry if you think otherwise. I’m a professional not a layman.

      It’s my business to know this. To help royalty owners with this.

      It’s not an angry opinion to jump on because I heard on TV. You can ask any landman with my qualifications or more and you’ll hear the same.

      Whatever budget schedule you think they had five months ago that they’re altering now is also business as usual.

      They know and have known they’ll be cutting back and most of us knew it too. Way before the prices were low.

      You think it’s just now started? No sir. They’ve been cutting operation phases in Texas since September.

      But NM and OK are now the boom. And they’re hiring Texas workers to fill positions.

      So while you see a cut back here, they’re seeing a boom there.

      So ultimately it’s you and most ppl like you who clearly do not understand simple economics let alone this industry.

      Unless you can provide actual evidence of your claim, please be more informed.

      And my business deals with these companies on the highest level. And business is good.

      If you understood the simplest of economic principles, this wouldn’t be an issue with you. I’ve already explained how the economics works here.

      What don’t you understand about supply and demand?

      If they are cutting now due to low price then explain why there were massive cuts when the price was $100/barrel? According to you they should’ve been hiring more. Adding more wells.

      But they plugged just as many wells and let go more workers in ’09.

      So your theory is invalid.

      If they cut when prices are both high and low, then that can only mean one thing. They cut no matter what. And everybody knows this thats in the business long enough.

    • The other issue that ppl are not taking into consideration is the types of wells being abandoned and plugged.

      It’s not an indication that they need to reserve revenue, it’s usually wells that simply not producing and is better to shut them in.

      This happens on a monthly basis. You can check with the Railroad Commission.

      Depending on the location and the geologist, many wells will be plugged if they don’t like how it’s producing.

      So you read a cut in rig count and you assume it’s due to pieces?

      They’ve been shutting wells this past year way before the prices dropped.

      Explain that.

      But all of a sudden you see prices drop and read an article telling you there’s a connection and believe it.

      While someone whose actually in the business, knows exactly why this ideas happening, and then has to hear from someone like you that I don’t understand the business?

      Please provide evidence or a better explanation other than repeating already unproven opinions.

    • Andrew…plugging wells and a reduction in rig count are totally two different things….just saying

    • The article was about both. The cessation of wells in production and the prospected wells.

      I’ve addressed both.

      They’ll cut back since they can maintain their output without additional drilling.

      And they’ll plug wells now for preservation or for lack of adequate production.

      Just saying.

    • Andrew – I hope your employer doesn’t see this, as soon as they find out how dumb you are, you’ll be in the first round of lat offs! But don’t worry it’s not because of low prices. It’s just because you are a numb nutts.

    • So instead of any evidence to support your position you can only rely on insults?

      It’s difficult to understand how you can’t get this when the rest of us do.

      Lol yes oil companies only lay off when the prices are low? Except the time they did it when it was high!

      So believe what you want, I’ve seen this before and you haven’t.

      You have no experience in this or else you’d already know.

      You think they’ve only cut when prices were low?

      But can’t explain why they cut when it was high?

      Whose the numb nuts now?

      You need to just stop. This must be over your head.

    • It is typical for a decrease in drilling, however, it is NOT typical for big producers to break contract on 60 Wells at a time and that’s what’s happening.

    • It’s actually due to a little thing called economics. If the price of a commodity is paying less than what is costs to produce it, they don’t produce it.
      E&P companies don’t do this for the fun of it.
      This thread is entertaining, for sure.

    • Yeah that happens too actually. Especially after the end of the year.

      Costs are reevaluated, and then it’s determined to continue in certain areas the geologist determines.

      We’ve seen this, or been apart of the operations, either way, it’s expected, and not uncommon.

      Rig schedules are always changing.

      It just happens to be at a time of lower cost per barrel but it shouldn’t be connected.

      They cut back more in ’09 and it was thought to be connected then.

      Instead it was oil companies relocating from one play to the next, or plugging wells not producing. And if they do see a trend in production is bad in a certain area, they’ll cancel the scheduled rigs for the following year. So even though it was reported to be connected, we all knew it was just business as usual.

      You move on to the next operation.

      The railroad commission reports on well data, that’s where we in the business get ours info. That or drillinginfo.com.

    • Also 60 rigs for one company is a drop in the bucket. That’s a fraction of what’s scheduled pet year. And even more so when compared to the total number of wells operated.

      As long as they decide how much barrels per day they need, they can compensate with well output.

  2. Why do the numbers in your article not add up to your reported Baker Hughes figure of over 90 shut down? Am I missing something. Offshore rigs maybe. I thought the Permian was down far more than that. Certainly not up by one rig. These numbers given cannot be figures from late December.

  3. There is actually more rigs up now than there was this time last year.

  4. Halcón went from 5 rigs in Buleson/Brazos county to 1.

  5. It doesn’t look like any of the producing plays or countries are going to reduce production on any significant level any time soon. http://video.cnbc.com/gallery/?play=1&video=3000344762

  6. I just talk to a buddy in Williston Nobel dropped there pay on rathole 4 hr and he has done 1 job in two weeks

  7. If the United States had any balls we would subsidize the shale jus to tell opec kiss my ass were still gona drill

  8. Ali Hernandez this can’t be good :-

  9. Yes our economy is fixing to epode!

  10. I know 🙁
    Just watching the gas prices going down is bad Yvette Medellin-Flores

  11. I grew up in the oilfield and I’ve seen 40 years of up and down. Give it a few years and there will be another boom

  12. Im offshore shore none of the offshore platforms are shut down yer

  13. Legalize Hemp, and u can make biodiesel and biodegradable plastics……

  14. If they are laying off now because prices are low, then explain why they laid off when the prices were at $100/barrel five years ago!!! Same reason? That makes no sense. You can’t have it both ways.

    You: when prices are high that’s when they cut

    Me: but prices are low

    You: yup, that’s also why they’re cutting.

    Me: so pretty much they just cut

    You:????

    The price is not the factor. Why would oil companies continue to drill wells when they’ve already saturated the market? Of course they’re cutting.

    Everytime they finish with drilling operations they cut back.

    Of course they over hired to begin with, so they’re not losing profit revenue.

    Again, I’m an RPL and member of the AAPL

    Personal Landman

    I’ve seen this since ’98. If just happens that while it’s happening this time, the prices are low.

    The last time they cut it was high and they said the same.

    That alone shows that cuts are independent of price. Not when production had been inflated to increase supply to begin with.

    • But u all should know how wells work too. When wells r drilled then fracked , the well will preform its greats rates from the beginning.. usually after six months they have to be rodded up then they pump. For example worked on a well here in williston nd , right after frack had 1200 psi on it producing 1600 barrels a day then after six months it died put a pump jack on it and it only does 400 barrells a day. So when the stopp drilling and all these wells u start to loose ur rates. For example look at Alaska oil production rates from the past years from now its like a 1/3, of wat was

  15. I really wanted a job on a rig

  16. I heard on the radio today there’s 1,855 (roughly) rigs in the U.S. 800+ are in Texas and only 14 have been stacked?

  17. Well I was reading the very informative comment above, but fracking is extremely expensive and with prices of what they drill for so low it is having an extreme impact on them. Obviously there are numerous factors involved with wells being shut down, but gas prices no doubt has an extreme effect.

    13 years ago gas was low and everything was fine, but also when gas was low cost of living was lower, minimum wage was lower, prices for equipment, employees, chemicals, etc.to drill were lower. When cost of living had an extreme rise it was a domino effect and as we know once things go up they don’t generally go back down. So with gas going down and their drilling costs staying the same…. I mean just like 2+2=4 it just makes sense that this undoubtably has an impact.

    Overall, oilfield is a roller coaster, but when you see such a huge impact in so little time it gets scary.

    I also agree with Robbert, forget OPEC we have to keep our people and fuels flowing.

  18. North Dakota is always slow in the winter. Everything is frozen tundra up there. This crap will come back around March or April. To much money invested in it to not come back

  19. Funny how they slow down in N.D. when here on the slope in A.K. we operate 10 months out of the year on frozen tundra and don’t slow down..

    • Highly likely. I saw hundreds and hundreds of wells with new ones getting drilled and fracked. Just hit I 20 west till ya hit New Mexico.

      • Funny… im in the permian. The operator im working for is laying down all but 6 rigs from 18. Other operators are also stacking rigs. We are also looking at layoffs. Ive been in the patch a minute. Not as long as you but ive been on the labor side not the office side. The labor force will see any cutbacks first. You might be a land man but so is my neighbor and I dont care what mythical trend you go by but in 09 when h&p went from 50+ rigs in the barnett shale to 18 because the price of natural gas dropped thats a good indicator as to why operators are stacking rigs. The operators might not be drilling but they are definitely leasing up land for when the price comes back up.

    • Loco Hills is shutting most every thing down.

  20. I work in watford city North Dakota and have been getting 80+ hours a week for 2 years its not slow for us electricians !!!! Matter of fact just did 13 today and called it early cause its saturday

  21. Its bad right now guys. I been through 4 drops & its the same every time. I’m getting the word that we are going to bump back Drillers & hands to make room for Pushers. It WILL get better, but it is going to be a while on this 1

  22. Please report the type of wells being shut in. Check the railroad commission. Are they gas or oil? Were they not outputting enough? There are many reasons for this.

    They shut in and plug wells every year that aren’t producing.

    Just because it happens during a time of low prices is not a direct indication of why they’re being shut in.

    Please provide a more thorough reporting.

    Those of us in this business see this happen in both high and low prices per barrel.

    They are constantly removing rigs every year. This isn’t new.

  23. Fracing is still in fir the time being

  24. New Mexico booming big time!

  25. You can make it pay at 40$$bbl and lower it’s its a scam they playing on us

  26. It is not the normal winter slow down … we will be below 800 rigs in the next few months in the US for the first time in years and it will hold all year ; if not 2 …

  27. Im an Offshore Deepwater guy and not much of a slow down in the Gulf of Mexico.

  28. Keith Wilbee they just stacked 26 rigs (cold) in the Permian (ie new mexico) this week alone …

  29. Here in Hobbs NM I am an engineer for a wireline company and we are busy. We have actually picked up not slowed down.

  30. Im contracted to 100 rigs n have had pretty much 80% of them stacked out here in the Permian area.

  31. if oil drops below $50-$60 a barrel. It’s not profitable for the fracking industry.

  32. Allot of Jon’s being lost due to dropping oil prices. It doesn’t help that we have billionaires playing rush and roulette with stock markets yet we have no say in that. But yes OPEC can kiss all our blue collar average joe working ass. But on top of it all this oil export ban is hurting us guys that make a living on the road away from loved ones.i love low gas prices but I also loved being employed even more. 7 years oil and gas and it all changed with a flip of a switch now can’t find a job

  33. I work in the eagle ford and there has been 60 rigs in 2 weeks in Texas alone and more to come they are already going through layoffs in alot of companies not just the drilling and fracing it’s all the others that go with it as well

  34. Thing about the oilfield is everyone thinks they know but really none of us know shot we just hope for the best

  35. If you need proof of what’s going to happen just look back to the eighties crash

  36. My rig was stack 1st of the year with no return date

  37. Keith Wilbee wat company u with

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