Compared to last week’s record, a larger increase was observed in the horizontal rig count this week with new rigs concentrated in shale producing regions and the Permian. 11 out of the newly added oil rigs are horizontal. This implies that producers are getting set for greater yield. Oil produced from new wells is likely to receive a material boost during the summer combined with the present inventory of drilled but yet-to-be-completed wells (DUCs).
Following a very disappointing EIA inventory data, crude oil prices remained as they were after dropping on Thursday. Here is a summary of the whole event.
– The horizontal count increased by eleven.
– An increase by nine in the total U.S. rig count both oil and gas.
– The directional count fell by two.
– An increase by ten among total U.S. oil rig count.
Combined with the 11 rig increase experienced last week, there was an increase by 10 in total U.S. oil rig count. Evidently, there has been a 21 rig increase alone within the space of 2 weeks. Indeed, this is a great number. Either being located in highly productive fields or horizontal as it were, most of these rigs are known to be of standard quality.
In addition to the 7 horizontal rig increase recorded last week, a unique 2-week increase in horizontal rigs was experienced. Since August 2014 (before crude oil prices came tumbling down), nothing of this kind, has been observed. It is Indeed, the largest one ever to be recorded as all the oil rigs which were known to be horizontal rigs, increased by eleven.
However, one of the newly found rigs is sited in a highly grassy field, there was decrease by one among natural rigs. No new vertical rigs were recorded.