RigData Insights

Despite OPEC, US Unconventional Plays Holding Strong

  • Tuesday, April 7, 2015
  • Posted By Unknown
Despite all the talk about OPEC trying to shut down North America’s unconventional drilling boom, unconventional plays are still hanging in there, according to RigData’s RADAR newsletter. Unconventional plays’ share of the rig count has settled at a record 77%, a sharp rise from 2014’s 72% average. Since horizontal drilling now accounts for almost 80% of the US rig count, that adds pressure on drillers with fleets dominated by small mechanical rigs—as well as the operators who hire them—to consolidate and/or exit the business. The rig auction houses and brokers who specialize in selling US rigs abroad are going to be very busy this year. As abysmal as overall rig utilization is at 45%—its lowest point since mid-March 2009—utilization in unconventional plays is holding up better at 49%. In 2014, total overall utilization averaged 80%, while the unconventional rig utilization rate was 77%—no doubt the influence of pad drilling’s rise as more pad-capable newbuilds displaced older rigs. The exodus of small operators and drillers has tilted the playing field back to the unconventionals.




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