??? US L48 Oil & Gas Activity Update???: As of May 10, 2024

What’s up energy fam! Without surprise, the total rig count took another little tumble this week by two, losing three on the oil side while gaining one on the gas side. The two-rig drop comes from the Permian side, with the small and mighty Cana Woodford adding one. Something to note when it comes to rig count, its less important looking at small movements WoW, instead, we need to be looking at the overall trend. In our case in the L48, we’ve lost a total of 19 rigs since January, most of which came from the Haynesville (-10) while another 21 have come from ‘Other.’ This makes sense, especially as the Haynesville is a pure gas play and ‘Other’ basins are either heavily exposed to gas, or their cost of supply and breakevens don’t bode well in today’s commodity environment.

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Frac spreads took a nice little pivot, adding six last week. That puts is only 14 spreads behind last year’s number and a current rig count to frac spread ratio of 2.3. At the peak in January of 2023, we were seeing 3.1 rigs per frac spread, which has continuously decreased since then and currently sits at 2.3. One would think that with all these efficiencies, we’d see that trend move in a different direction, suggesting fewer frac spreads needed to keep up with rig count. Further analysis is needed to come to a consensus there… hoping someone can chime in!

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On the oil price side, WTI fluctuated slightly between $76.99 and $79.90 per barrel, without any indication of clear direction. While inventory reports showed a bullish signal with reductions in the US and Europe, gasoline prices weakened as diesel prices began to stabilize. The market also reacted to investor speculations, ongoing OPEC+ discussions, US Strategic Petroleum Reserve activities, and studies on media-triggered price concerns, reflecting continued complexity influencing oil prices.

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As for last week, let’s take a look at the numbers~

US Land Highlights as of 05/10/2024:

Total US rig count decreased by 2 for a total of 603

YoY change of -128

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US L48 Rig Count

Oil rig count: 496 (-3)

Gas rig count: 103 (+1)

Misc rig count: 4 (N/A)

Basin Rig Count

Permian: 314 (-2)

Eagle Ford: 52 (N/C)

Haynesville: 34 (N/C)

Williston: 34 (N/C)

Marcellus: 29 (N/C)

Cana Woodford: 22 (+1)

DJ-Niobrara: 10 (N/C)

Utica: 11 (N/C)

Others: 87 (N/C)

L48 crude oil production unchanged at 12.7mmbpd

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Alaska crude oil production decreased from 430 to 421mbpd

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Total US crude oil production unchanged at 13.1mmbpd .

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Dry natural gas production decreased by 0.2% (0.2 Bcf/d) to average 98.8 Bcf/d

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Average natural gas deliveries to U.S. LNG export terminals increased by 0.6% (0.1 Bcf/d) week over week, averaging 12.3 Bcf/d

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L48 frac spread count increased by 6 reaching 258

-14 from this time last year

Rig count to frac spread ratio of 2.3 (Total overage: 2.6)

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EIA L48 DUC count and production numbers will be released today, which will be reported on in next week's Industry Update!

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All data is public and published by Rig Count:?Baker Hughes WTI/DUC/Production:?U.S. Energy Information Administration Frac Spread Count:?Primary Vision Network - Frac Spread Count