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  • Eckard Enterprises, LLC
  • Eckard Enterprises, LLC
  • Eckard Enterprises, LLC
  • Eckard Enterprises, LLC

U.S. Drilling Rig Count Increases

October 6, 2016



The U.S. drilling rig count has increased by 11 drilling rigs this past week. Drilling companies and producers are liking the current price and the lower cost of exploration apparently.


Special note is where these rigs were added!


  • One new drilling rig was added in the Marcellus – Gas prices are rising and that makes the Marcellus a great deal more attractive since it is mostly a natural gas play!

  • One new drilling rig in Colorado – There is shallow oil to be developed in Colorado and these type of tests and trends makes economic sense at sub $50 per barrel pricing.

  • Three new drilling rigs added in New Mexico – This new activity is most likely due to the hot and developing Delaware Basin that is evolving and carrying over from Texas into New Mexico.

  • Alaska and Arkansas – I think these wells are one offs and flukes to the overall activity numbers!   This won’t last and we should see these rigs let go after these two wells are drilled.

  • Texas was down by one rig –  Normal shuffle but seems Texas has its focus narrowed with Eagle Ford being very thin now and West Texas going crazy!

  • Louisiana was up one drilling rig – We should and will see more wells drilled as conventional wells are very economic at sub $30 a barrel and prices paid for high gravity Louisiana crude and rich natural gas is very advantageous.


Conclusion: This week’s total number of drilling rigs will not sustain our U.S. daily output of crude oil, period!  We will see a continual erosion in daily production numbers even as undrilled wells (DUC) wells are eventually completed and brought on line.  So, forward planning and investing NOW makes sense in areas tied to energy services, adding new production and building reserves.  NOW, not next year, when drilling prices will most likely rise by 10-25% as demand goes up and the beaten down service providers start charging a reasonable price again.    This will happen even with this small increase in additional drilling rig activity because many service providers have been decimated.


We are at the bottom of this downturn and whatever your flavor, secure it and invest in it soon! If that means investing in public oil stocks, drilling participation, investing in tangible assets to or other energy related opportunities.  The price for all the above will only go up and more expensive from here.

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