January 2017 marks the first month to post a year-over-year increase in average land rig count since the downturn began. Per Platts RigData’s RADAR Report, the average tally of active rigs this month is 641; that’s an 88-rig, or +16%, YOY increase.
The YOY rig count increase is impressive, but drilling efficiencies don’t seem to be improving on recent gains. To a large extent that’s the result of two things:
1) The re-emergence of private operators as dominant players in the rig count, in response to the oil price recovery vs. sluggish gas drilling dominated by public companies; and
2) the continued cherry-picking (high-grading) of well locations to maximize returns in a still-uncertain oil price environment vs. the pad drilling-inflected full development mode that dominated during the boom. This theme will be examined in more granular detail in this week’s issue of the RADAR Report.
Call 1-800-627-9785 to subscribe to Platts RigData’s RADAR Report, the leading statistical monitor of overall land rig market activity and drilling trends by region, play, operator, driller, and many other proprietary metrics.