Much like the prices of oil and natural gas, the US active land rig count continues to probe for a new bottom. The latest issue of RigData’s RADAR (Rigs and Drilling Analytics Report) cites a decline of -38 to 641 active rigs for the week ended December 4. Looking at the data for the full month of November, the tally averaged 684 rigs, down -30 rigs or -4% compared to October’s average of 714.
Patterson-UTI reported that its average active rig count for November was 89, down -3% from an average 92 rigs in October. PTEN’s 4Q15 guided estimate of 85 rigs implies its count may drop -17% in December. If PTEN’s expectations turn out to be a good proxy for US land rig demand, then an argument for the US land rig count dropping below 570 rigs in December now seems plausible.
Given the usual seasonal decline that bottoms in December, together with oil and gas futures prices hitting their lowest levels in over a decade, onshore drilling markets are looking grim indeed.