"As oil and gas prices fall, drilling activity in the U.S. is slowing more than expected, battering shares of drilling companies, hurting economies in energy-producing states and sowing the seeds for supply shortages when the economy recovers.
In its weekly accounting, Baker Hughes Inc. reported Friday that the number of drilling rigs working in the U.S. had
fallen to 1,790, down 12% from the September peak and down 2% from the same time last year. It was just the second time the weekly report reflected a year-over-year decline in the past five years.
Most industry analysts now expect hundreds more rigs to fall idle by the middle of next year. Some industry experts suggest a drop of as many as 1,000 rigs, which would represent a 50% decline from the peak set in September. That would leave fewer rigs running than at any time since 2003..."
however
OGJ:
"The largest decline was in land operations, down 55 rigs to 1,716 working. Inland waters operations lost 9 units with 9 still drilling. That was partially offset by a gain of 2 rigs in offshore drilling to 62 active rigs in the Gulf of Mexico and 65 offshore overall"
My earlier estimate was that land drilling activity would bottom in midsummer of '09 and currently I'm sticking with that estimate. If the economic situation gets really really bad, the drilling activity will probably bottom in late ´09 or early ´10. I would imagine that a number of land drillers will bite dust within the next 18 months.
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