Plummeting land rig day rates eased their decline rate in January, according to RigData’sDay Rate Report. However, a further drop in the US average land rig day rate of -1.2% in January remained grim news, coming on top of a final 2015 quarter’s net cumulative drop of -3%, noted the RigData News & Analysis (RDNA) team.
As of the end of January, the average US land rig day rate, aggregated across all rig horsepower classes and all regions, was $15,588, the lowest it’s been since 2Q 2010, when the national average fell below $15,000. Since the all-time record high of $19,015 set in October 2014, this metric has shed $3,427, or -18%. But there is an apparent bright spot of sorts:
All but one of the major drilling markets showed improvement in January compared with the brutal plunge of -2% in December. Countervailing pressures on the US overall average day rate include smaller rigs exiting the market, providing a little uplift to the average, while larger rigs roll off term contracts to enter the spot market, inviting downward pressure.