The “Baker Hughes Rig Count” shows the oil & gas drilling rig count has plummeted in the past year. The month April is the first time in 25 years the North American oil and gas drilling rig count has fallen below 1,000 rigs. The price of crude oil in the past year had fallen as much as 50%. Many expensive shale oil wells have become uneconomical at current crude oil prices. Much of the US crude oil increased production comes from shale oil formations with expensive horizontal drilling. Shale oil formations often must be fracked several times; consequently, productions costs are high.
Here are the following drilling rigs statistics as of May 8, 2015:
US One year ago Rigs idle
894 1,831 -961
North America
969 2,017 -1031
International (April)
1,202 1,349 -147
Texas (May 8)
379 892 -513
North Dakota
80 176 -96
Oklahoma
102 195 -93
Louisiana
70 110 -40
The drop in US drilling rigs will result in a drop in US crude oil production. There are 1031 drilling rigs idle in North America. The drop in Texas drilling rigs is dramatic in terms of jobs lost, service equipment loss, and oil royalty income. The issue is where is the bottom of oil and gas rigs being idle?
Peter Maffitt is a news contributor for Breitbart Texas.