The total number of operating rigs in the U.S. the week ending September 7th was 1,048 with 860 being oil and 186 gas. In percentage terms, on a month on month, (m/m) basis, oil rigs were down 1.0% and gas rigs remained flat m/m. On a year on year, (y/y) comparison, rigs were up +13.8% for oil and down 0.5% for gas. The combined figure was +11.0% or +104 rigs.

rigcount-fig1Figure 1 shows the Baker Hughes U.S. Rotary Rig Counts for oil and gas equipment in the U.S. from 2012 to present. Despite the recent upward momentum, the rig count is still well down from the lofty 1,930 level enjoyed in September 2014.

Figure 2rigcount-fig2 presents the North American rig count by basin. The Permian basin in West Texas is by far the largest producer, (It reaches from just south of Lubbock, to just south of Midland and Odessa, extending westward into the southeastern part of New Mexico). On September 7th the Permian basin contained 484 oil rigs and zero gas rigs. At less than one fifth the output of the Permian are the Cana Woodford, (66 oil, 0 gas) and Eagle Ford, (68 oil and 10 gas) in the number two and number three spots. Eagle Ford is also in Texas while the Cana Woodford is mostly in Oklahoma but does stretch into the northeastern part of the panhandle in Texas. The Marcellus basin (Pennsylvania, West Virginia, Eastern Ohio and Southern New York) had the most gas wells with 53 and zero oil. Haynesville (eastern Texas and western Louisiana) was a close second with 48 gas rigs and zero oil.

Canadian rotary rig count totaled 204, 133 oil rigs and 71 natural gas rigs. These figures were down 5.0% m/m for oil and up 2.9% m/m for gas, -2.4% on a combined basis. On a y/y comparison, oil rigs were up 30.4%, while gas rigs decreased by 29.0% for a combined increase of 1.0%. The province of Alberta had by far the greatest amount of rigs with 144, (70.6%), followed by Saskatchewan with 41, (20.1%).

At Gerdau we monitor rig counts along with the price of oil and natural gas since it has a major impact on long product sales to include Special Bar Quality sucker rods for downhole pumping strings to merchant and structural products for rigs and oilfield equipment.