US drilling nears a 3-year low

HOUSTON — US drilling activity continued to plummet, down by 53 rotary rigs this week with 1,515 still working, said Baker Hughes Inc.

That’s the lowest activity level since the week ended Feb. 3, 2006, when the US rig count was 1,513 and climbing. Last year at this time, there were 1,747 rotary rigs drilling.


Declines were reported this week in all three categories. Land operations were down 46 rigs to 1,442 working. Inland water activity declined by 3 units to 8, and offshore drilling declined by 4 to 65 rigs in US waters as a whole, including a loss of 3 to 61 in the Gulf of Mexico.

On Jan. 22, the day before the Baker Hughes report, Paul Horsnell at Barclays Capital Inc. in London said, “The latest US rig counts seem to imply a sharp downturn in industry confidence and in the willingness to invest. US drilling activity has fallen by 99 rigs (23%) over the past 4 weeks alone and does appear set to move even lower. In our view, the impression given by the data of an industry which is pulling in its horns rapidly, and which is moving with haste to reexamine, scale-back, and postpone expenditure seems to be an accurate one.”

Oil & Gas Journal