National Oil Rig Count 1,140 - Below amount required to maintain production - Will decline further
Last Friday's report showed a decline in oil rig count nationally to 1,140 rigs. The number of drilling rigs is a leading indicator of future US production. In a I laid out the case for linking the number of rigs required to maintain US production. The US has now fallen below that number.
Rigs actively drilling are now 20% below last year's levels at this time and 30% below the peak set in October. Based on 2008 the number of rigs actively drilling will decline further, to well below 1,000 rigs.
Because of the availability of abundant data, most of my previous analysis regarding shale production has been based on North Dakota and then extrapolated to the remainder of the United States. The premise for this extrapolation was the similarity…