The addition of another 16 drilling rigs into activity is proof that the shale players feel they can make money even at $45-$50 oil. There are continued increases in drilling activity in various states that have been slow to recover, as casing head and natural gas prices stay above $3.00 per MCF, and with oil prices showing pricing resilience at $46 a barrel and moving back over $50 a barrel today. This is great for our fabrication business at Royalty Fabrication, and of course, for all of our wells that need better pricing for stronger economics.
I still worry about too much supply! But, for now, the market is seemingly approving of the combined increases in exploration activity coupled with price support, and the current pricing of commodities.
Find additional information about rig count at Baker Hughes Rig Count Overview
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