Oil Rig Counts on the Rise in the US
The Baker Hughes weekly rig count reported the United States currently has 2000 rigs actively exploring for oil and natural gas, an increase of 313 rigs from this week last year. Of these working rigs, 1,130 are drilling for oil and 865 are used in gas extraction. The rig count, which has been issued since 1944, acts as an important index for drilling contractors in gauging the overall business environment of the oil and gas industry.
The rig counts are reaching record numbers in the Permian Basin. “We have 400 drilling rigs running around Odessa and Midland that are drilling two wells per month at an average cost of $2 million per well,” said Kirk Edwards, President of MacLondon Royalties and prior President of the Permian Basin Petroleum Association. The current rig count in the Permian is sixty percent higher than the oilfield’s count in August of 2008.
Oklahoma-based contract driller, Helmerich & Payne, has purchased 17 new rigs, forecasting an increased demand in this oil and gas drilling boom. The company has set their capital expenditure for 2012 at $1.1 billion, a 58 percent increase from 2011, and has advised three- fourths of the budgeted amount will be spent on new rigs. A company executive at Helmerich & Payne stated “We see a lot of demand in Eagle Ford and the Permian and the Bakken, so you would think there could be rig count growth.”
As oil and gas companies continue to move into the oil and liquid rich shales across the US, the demand and production for oil rigs will continue its upward trajectory.