Texas, U.S. rig count declines

HOUSTON — The number of rigs operating in the United States declined by 29 last week to 1,811, marking the fourth consecutive weekly decrease for the U.S. count, published by oil field services company Baker Hughes.

Texas, which has more rigs than any other state, also experienced the biggest drop, from 852 to  840.

The latest figures combine with last week’s decline of 35 to mark the largest two-week drop in the U.S. rig count since 2009.

The North American rig count was down 77 for the week to 2,019 rigs, according to the study.

The declines come at a time when oil prices continue to plummet. West Texas Intermediate, the U.S. benchmark price, briefly fell below $50 per barrel Monday — its lowest since April 2009.

On Monday afternoon, crude was trading at $50.36, less than half of its 2014 peak of $107.26 per barrel in June.

The shrinking rig count comes at a time when a slew of exploration and production companies, among them Marathon Oil, Linn Energy and Continental Resources, have said they plan on pairing back spending in 2015 in response to falling commodity prices.

Jamie Webster, senior director of global oil markets at IHS, said U.S. shale drillers aren’t going to stop drilling altogether — but they’ll be more selective about the wells they drill as oil prices fall.

“It’s not like everybody just decides ‘I’m not going to drill,'” Webster said. “You’ll focus on the sweet spots. Anything you think might be marginal, you’re obviously not going to go for.”

The U.S. rig count is declining in late 2014 and early 2015 as oil prices continue to fall.
The U.S. rig count is declining in late 2014 and early 2015 as oil prices continue to fall.
SHOW MORE