US Drilling Rig Count Fell by Largest Total in 23 Years

Of those working rigs, 1,684 are land-based, 54 are operating offshore and 12 are working inland waters. The count comes from oil field services company Baker Hughes Inc. (NYSE: BHI).

The decline in oil rigs comprised the entire loss of 61 working rigs last week. The number of directional drilling rigs shut down totaled 14, and 35 horizontal rigs were idled. Drillers also stopped work with 12 vertical rigs.

The Permian Basin lost 28 rigs last week and the Williston Basin, home to the Bakken field, lost eight. Both fields hit their 12-month highs for rig count last fall, with 562 rigs in the Permian and 198 in the Williston.

The Eagle Ford play dropped three rigs last week and now has 197 working rigs in the field. A year ago there were 227 rigs in the Eagle Ford, its highest total for the previous 12 months.

The rig count in the Gulf of Mexico has dropped by three, from 57 to 54, after hitting a high of 66 in September. A total of 44 of the 54 rigs in the Gulf are oil rigs.

Cuts to capital budgets among exploration and production companies have already begun to have an impact on the number of rigs operating in the United States. Production is expected to rise even though the rig counts are dropping, at least in the near term. But as wells are completed, little or no new drilling will occur, especially in areas outside the sweet spots of the major basins.

An analyst with Raymond James expects 850 rigs to be idled this year as companies wait for crude prices to rise again. The current U.S. rig count of 1,750 is roughly equal to the total of 1,754 at the same time last year.

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