RigData Insights

Looking at How the New Drilling Paradigm Evolved

  • Tuesday, June 26, 2018
  • Posted By Unknown

New drilling paradigm 062218 


 Source: S&P Global Platts Analytics

Looking at How the New Drilling Paradigm


The latest active land rig count establishes the first 2 weeks of June as the strongest 2 weeks for the tally since March 6, 2015. It also establishes 2Q 2018 to date (999 rigs) as the likely highest rig count average for a quarter since 1Q 2015 and is 173 rigs, or 21%, over 2Q 2015; 596 rigs, or 148%, over 2Q 2016; and 118 rigs, or 13%, over 2Q 2017. In comparison with the previous half (4H 2016), the first half of 2017 saw oil prices rise by 6% in parallel with a rig count that jumped by 48%.

But in 1H 2018, when NYMEX prompt (next month) crude jumped by 26%, the rig count rose by only 12%. NYMEX crude in Q1 of this year was $5/bbl less than it was in Q2 to date, and the rig count increased quarter-to-quarter by 47 rigs. For the same periods in 2017, QTQ comps were -$4/bbl and +162 rigs.

The Rigs and Drilling Analytical Report (RADAR) team contends that this trend reaffirms their stance that the much-touted sensitivity of the rig count to commodity prices has greatly diminished.

The RADAR team writes: "Despite the second-biggest week-to-week increase in the rig count this year and the second consecutive tally to handily top 1,000 active rigs, we still see incrementalism at work. With oil prices slipping and Saudi-Russia talk of "opening the taps," operators overall are still taking it easy."




Receive a free one month trial of RADAR (4 issues). Each week you'll receive the latest analysis of unconventional activities and general trends in the upstream market. Operators are categorized by the major shale plays and unconventional formations where activity is occurring. Plus, you'll see the drilling contractors involved by play with details on utilization, footage and market share. (Available in pdf and Excel format.)

Call 800-371-0083 or email CustomerService.RigData@spglobal.com.

Mention code 7HHONRPT

Upstream Activity Data for North America 

For more information on North American upstream activity including permitting, drilling activity, production and completion data please contact S&P Global Platts via email CustomerService.RigData@spglobal.com or call 800-371-0083.






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