Drilling Collapse Continues in the Permian, Texas, USA

Drilling activity continued to slump, falling for a fifth consecutive week. Declines have been observed in the United States, Texas and the Permian Basin.

Oil services company Baker Hughes said on Friday its U.S. rig count fell by one rig to 759, the lowest level since late July. Still, the number of rigs is up 256 or 51% from the 503 counted last September.

The number of crude oil rigs fell by five to 591, the lowest level since mid-June, but 190 more than the 401 oil rigs last year. The rig count for natural gas rose by four to 166, the highest level in three years – August 2019 and 65 more than the 101 reported a year ago.

Texas abandoned three rigs for 359 wells across the state, up 124 from the 235 active last year. New Mexico added a platform for 109. Alaska (1), Kansas (1) and Utah (1) joined New Mexico as producing states recording increases while the Louisiana (1) and Oklahoma (1) joined Texas in posting declines.

The Permian Basin fell two platforms to 340 – 86 more than 254 last year.

Lea County, New Mexico remains the busiest county in the Permian Basin with 66 rigs, up two for the week. Eddy County, New Mexico follows with 40 rigs, down one.

Midland County was flat at 33 rigs a second week while Martin County fell two to 32. Reeves County was down three rigs to 30. Howard County added a rig 22 and Loving County fell one platform to 21. Upton County reported 20 platforms for a third straight week. Ward County had 15 rigs for a third week and Glasscock County added a rig for 14 at work countywide.

Enverus Foundations, part of energy-focused software-as-a-service company Enverus, said its US rig count fell from eight last week to 858 in the week ending May 7. September, according to the data. The number is up 2% in the past month and 42% year-over-year.

Most of the weekly decline occurred in the Permian, where the rig total of 317 fell seven weeks on a week. The Gulf Coast dropped three to 115 rigs and Williston Basin dropped two to 41 rigs. DJ Basin was steady at a 2022 high of 22 rigs, while Appalachia added a rig to reach 60 and Anadarko Basin lost a rig to land at 77. The Rigs running outside of major games increased by four to 228.

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