Rigs and Spreads June 2: Plummeting


  • Rigs counts fell sharply -- again

    • Total oil rig counts declined, -15 to 555

    • Horizontal oil rig counts fell, -14 to 502

    • The Permian horizontal oil rig count was down 4

    • The rig count has fallen by 50 (9%) since March alone, and stands at the level of April 2022

  • The pace of horizontal rig additions fell an eye-opening 8.25 / week on a 4 wma basis.  

    • This number has been negative for 25 of the last 26 weeks

  • Frac spreads were -4 to 256, a level last seen in September 2021

    • Spread counts are down 38 (13%) in just the last six weeks

  • Overall, the picture looks reasonably grim

    • Both rig and spread counts continue to roll off, sharply in the last few weeks

    • The implied breakevens are well above $80 / barrel WTI

  • Until we see technological innovation at scale such as Exxon has floated, the shale sector could be headed for a rough patch indeed