In the News

Oil and Gas Update - May 2015

May 1, 2015

The U.S. drilling rig count dropped to 905 early this month, its lowest level since June 2009. That’s less than half of the peak of 1,930 last year.

Things were no better in Texas, where the rig count dropped to 380, down from 906 as recently as November, according to Baker Hughes. Texas still has 45 percent of the nation’s rigs at work.

Despite the precipitous drop in the number of rigs at work, both U.S. and Texas production are at their highest levels in four decades as a result of oil flowing from wells already drilled. But analysts say the drop in new wells combined with the usual rapid declines in output from older shale wells will probably cause total production to start declining until operators put more rigs to work. But most expect that to happen before year’s end.

Most of the rigs being pulled out of service appear to be in the least productive areas, analysts say.

The U.S. Energy Information Administration last month said it expects U.S. oil production growth to slow as early as this month due to those rapid production declines in older shale wells.

The Permian Basin in West Texas and the Eagle Ford Shale field in South Texas both are still two of the most active fields in the country.