December 6, 2022

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Baker Hughes US oil rig count 378 vs 376 prior

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Weekly oil drilling rig data

Here’s a great chart on Drilled but Uncompleted wells (DUCs). US producers have been tapping that inventory this year because of low capex spending. They’re likely running a scam and classifying it as maintenance capex to try to look like they’re more profitable.

If the US doesn’t start ramping up drilling in H2, then we’re going to see US production fall off next year. There aren’t many more DUCs still available to drill, because some of the ones below are probably duds that are misclassified or have parent-child issues.

The problem is that that oilfield services won’t be coming cheap next year so profitability could be once-again challenged. Of course, that all hinges on the price of oil. At $75 WTI and higher, all problems are solved. Still, I don’t think there’s a viable path back to 13 mbpd, nor much of an appetite from US producers to get there. Just to maintain production at these levels, Precision Drilling estimates that rigs need to rise by 100.

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