20th March 2015
The Baker Hughes U.S. onshore rig count continued its decline this week, falling by 39 compared to a drops of 64 and 75 for the prior two weeks. The rig count has now declined by 844 (45%) from a November 2014 high of 1,876, to 1,032 on 20 March 2015. Rigs active in the Gulf of Mexico dropped 11 (9 oil focused and 2 gas focused), bringing the total to 37.
- 13 Mar 2015 - Rig Count Continues Slide; Closing In On A Thousand
- 06 Mar 2015 - Rig Count Decline Picks Up Pace Over Prior Two Weeks
- 27 Feb 2015 - Rig Count Decline Slows For Second Week In A Row
The Permian Basin once again leads the decline by basin dropping 19 rigs bringing total basin rig count to 292 from a 2014 high of 562 (drop of 48%). Eagle Ford rigs were down 8, compared to drops of 3 and 8 in the prior two weeks. The Williston Basin (Bakken) dropped 5 compared to drops of 4 and 3 in the prior two weeks.
Changes this past week place the GCA Index for U.S. onshore rigs at 57, 50 points down on the 2014 high and 3 points down on the previous week. This is still right on the 2008-2009 trend, but oil rig indices for key basins dropped another 2 to 4 points which places the Permian at 53, Williston at 55 and Eagle Ford at 58 points each.
U.S. oil inventories reached an 80-year high at 458 million barrels as of 13 March 2015 (up 10 million barrels on prior week) according to the EIA. The price of WTI remained steady week-on-week closing at U.S.$46.23/Bbl. The Brent-WTI spread fell slightly to U.S.$9.01/Bbl as of close of business Friday, with Brent closing at U.S.$55.24 a U.S.$0.76/Bbl decrease week-on-week.
The impact of declining oil prices was felt on the central Gulf of Mexico Lease sale 235 earlier this week. High bids totalled $539 million, down 37%, compared to lease sale 231 high bids of $850 million in March 2014. The decline in high bids over the past 2 years was even more dramatic. High bids in lease sale 235 were 57% lower than lease sale 227 high bids in March 2013.
Despite industry wide capital spending cuts, bids for higher cost deep water blocks fell only 20%. Blocks with depths more than 1600 meters garnered 64 of the total 169 bids, nearly 40%. Much of this interest is likely to have been generated by major recent discoveries in Green Canyon which received the highest number of bids.
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