BH Rig Counts for August – US Count Up by 32, M/U Up by 2
Two months ago when Baker Hughes released their venerable rig count numbers, we cracked a smile that things are beginning to turn around with an increase in U.S. rig counts (see US Rig Count Up by 9 in June, Marcellus/Utica Holds Even at 36). Last we had a full-on smile when the average number of rigs working in the U.S. in July was 449, up 32 from the 417 counted in June 2016 (see US Rig Count Up Against in July, Marc/Utica Steady for 3rd Month). This month we’re popping the champagne cork! For August, the BH average rig count in the U.S. was 481, up 32 from the 449 counted in July. The even better news comes in the Marcellus/Utica. Pennsylvania’s average rig count went up by 3, Ohio’s went up by 2, but West Virginia lost 3 rigs. Overall the combined Marcellus/Utica rig count, after being stead at 36 rigs for three months in a row, went up to 38 rigs in August…
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We’ve long bemoaned the fact that the first tactic used by oil and gas companies to stay in business during this severe downturn has been to layoff large numbers of employees. We understand all the arguments: better to cut some rather than go bankrupt and out of business, putting everyone at the company in the unemployment line. We also understand many of these same companies added large numbers of people over the past half decade in the rapid scale-up to handle all of the new shale drilling–so this is simply a “correction” or rebalancing. But tell that to someone who has lost his or her job and the families affected by it. “Hey, you’ve been made redundant” (as our British friends call it). Or, “You’re just a correction.” No, our sympathies are with the men and women who have been laid off and suffer. Some of the biggest layoffs have come from oilfield services companies, like Halliburton and Baker Hughes–both with major operations in the Marcellus/Utica. Tens of thousands have been laid off at each company over the past two years or so. In July Baker Hughes laid off another 3,000 in fell swoop (see 
Last month when Baker Hughes released their venerable rig count numbers, we cracked a smile that things are beginning to turn around with an increase in U.S. rig counts (see US Rig Count Up by 9 in June, Marcellus/Utica Holds Even at 36). This month we have a full-on smile. Baker Hughes released their July rig count numbers on Friday and the average number of rigs working in the U.S. was 449, up 32 from the 417 counted in June 2016. Cool! Was there also good cheer for the Marcellus/Utica? Er, well, maybe “no cheer” is the best way to put it. PA’s rig count went up by one in July, Ohio stayed the same, and West Virginia’s count went down by one. Once again in July we had a Marcellus/Utica rig count of 36, same as June and the same as May. Hey, at least it didn’t slide backward! That’s progress of a sort…
Once the Obama Dept. of Justice burst the dream of merging with Halliburton (see 
The news is now months old that Halliburton and Baker Hughes ended their attempt to merge. The reason they called it off was because of opposition from the Obama Department of Justice (see 
Ever hear the phrase, “Better to try and fail than never to try at all.” That’s actually the name of a poem from William O’Brien (dead poet, read his famous poem 
The rig count–both internationally and domestically here in the U.S.–continues its historic slide. Last Friday Baker Hughes announced the average rig count numbers for April. Rigs operating outside the U.S. slide another 39, from 985 in March to 946 in April. In the U.S., the count slide 41 from 478 in March to 437 in April. In the Marcellus/Utica, the count was down another 2–both rigs lost came in Pennsylvania, which now has the lowest count in decades: just 16 rigs operating in the state. Ohio and West Virginia held constant month over month with 11 rigs operating in the Buckeye State and 12 rigs operating in the Mountain State. Here’s the sad news of the continuing decline in rig counts…
It’s a sad day for Halliburton and Baker Hughes. The two companies intended to get married, with Halliburton buying out BH and merging it in a deal worth $35 billion (see 
Yesterday Baker Hughes released its first quarter 2016 update. According to BH CEO Martin Craighead, “the industry faced another precipitous decline in activity” in 1Q16, which means it wasn’t good for BH. The company reported that revenues were down 42% year over year during the first quarter. Ouch. The company list $981 million for the quarter, nearly $1 billion! Double ouch. The company, which maintains THE rig count everyone watches, said rig counts will stabilize in the second half of the year, but the company expects 2Q16 rig count numbers to slide another 30%, to all-time historic lows. Triple ouch. What about the Halliburton buyout of BH? The deal expires in two days on April 30. BH says beyond that date the merger agreement does not automatically terminate–they may decide to continue riding the merger horse. Time will tell. Here’s the BH update from yesterday…
Last Thursday MDN brought you the news that the Dept. of Justice has decided to try to block the merger/buyout of oilfield services company Baker Hughes by bigger oilfield services company Halliburton (see