Operators’ ability to develop previously untapped oil reserves through horizontal drilling techniques has led to a record 1,443 oil rigs currently in operation in the U.S. according to a report released last week by Baker Hughes, Inc. According to industry observers, one of the main drivers of the record rig-count is the ability to develop portions of well-known fields such as the Permian Basin formation in Texas and New Mexico through drilling techniques and technologies that didn’t exist even just a few years ago. “While it’s [the Permian] one of the oldest fields in the U.S., there are multiple producing formations there and companies are learning how to optimize horizontal drilling in them. The growth is evidence that they’re figuring it out,” said James Williams, president of WTRG Economics.
Timothy Dove, the COO of Pioneer Resources, which holds one of the largest positions in the Permian formation, said in 2014 the operator is spending the “vast majority” of its drilling capital in northern areas of the Permian. E. Joseph Wright, the COO of Concho Resources, Inc., estimates that his company, the largest Permian operator drilling for oil, will add four rigs throughout the year.
The Baker Hughes report also detailed that there are currently 345 gas rigs operating in the U.S. for a total of 1,792 rigs (oil & gas) in operation, the highest level in more than a year. According to Williams, “we may be finally seeing some impact in the gas count from natural gas prices.”