As US rig counts fall, well counts show resilience
An important look at drilling efficiencies across the US oilfield
The US rig count continues to grind along, now down nearly 10% from where it was a year ago.
This decline is the result of two factors.
One is that operators are exercising considerable capital discipline, finding ways to reduce their capex so they can instead fuel their dividend and buyback programs.
Another is the accumulation of well construction efficiencies across the oilfield, where operators are now able to do more with one rig than they were even a year ago.
I write a ton about capital discipline in the oilfield, because it’s driving structural changes that are remaking the financial landscape of this sector.
In this post, though, let’s take a look at the efficiency side.
Specifically, we’ll compare what’s happening to rig counts with what we see in well counts.
We’ll explore a specific view of just how much more efficiently operators are using these rigs today than they did in the past.
And we’ll close with a look at the total producing well stock here in the US, which has changed notably over the past decade. This last view will give us a good sense of how these well construction efficiencies are changing the structure of the oilfield.
Without further ado, let’s dive in.
US rig counts are down 8% year-over-year
Let’s start with a holistic view of the US rig count, which is what we find in the chart below.
