Baker Hughes U.S. Rig Count Even @ 600, M-U Adds 1 @ 38
Two weeks ago, the bottom pretty much fell out of the U.S. rig count, both nationally and for the Marcellus/Utica region. We hit new lows for both counts (see Baker Hughes U.S. Rig Count Drops 4 @ 600, M-U Drops 3 @ 37). Last week, we tread water. The national rig count maintained at 600 (at least it didn’t dip into the 500s). The M-U count picked up one in Pennsylvania for 38 active rigs across all three M-U states — 22 in PA, 10 in OH, and 6 in WV.
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Last week, the Baker Hughes U.S. rig count lost another two rigs, down to 603, the lowest the count has been since January of 2022. Since last October, the national count had gone as low as 616 and as high as 629, and that was it — a fairly narrow band. That is, until three weeks when it crashed through the floor and went lower, down to 613. Then, two weeks ago, it was down to 605. And now, it has gone even lower, down to 603. Will we see it go lower than 600?
Last week, the Baker Hughes U.S. rig count lost another eight rigs, down to 605, the lowest the count has been since January of 2022. Since last October, the national count had gone as low as 616 and as high as 629, and that was it. No higher and no lower. That is, until two weeks when it crashed through the floor and went lower, down to 613. And now, it has gone even lower, down to 605. The Marcellus/Utica remained even at 40 rigs after losing one rig two weeks ago. Pennsylvania operates 21 rigs; Ohio operates 11 active rigs; and West Virginia operates 8 rigs.
Two of the world’s largest three oilfield services (OFS) companies, Halliburton and Baker Hughes, provided updates this week for their second-quarter performance and operations. Both companies said essentially the same thing. Drilling is slowing down in U.S. shale, but offshore drilling in other parts of the world is still going strong and makes up for the slowdown here at home.
It’s earnings season, the time when publicly traded companies publish their latest quarterly (and in this case, annual) financial statements–for 4Q22 and all of 2022. Three of the biggest oilfield services (OFS) companies in the world–SLB (formerly Schlumberger), Halliburton, and Baker Hughes–have now issued their quarterly updates. And all three have a common theme: Expect more drilling internationally in 2023, especially in the Middle East and Latin America, but expect about the same amount of drilling (or less) in the U.S. this year.
From time to time, we bring you news about hydrogen (H2) because, for many, H2 is the next “big thing” in energy. Many on the left are dazzled by H2 energy, although some of the more extreme elements of the left oppose H2 energy because most H2 is produced by cracking methane (see 
Baker Hughes, one of the biggest oilfield services companies on the planet, issued its second quarter earnings update yesterday. The company reported a net loss of $839 million during 2Q, but more than half that number is due to a write-off of its oilfield services business in Russia. What caught our attention was not the company’s financial performance, but the words of its top leaders in describing the near- and long-term future for natural gas. Baker Hughes is VERY bullish on natural gas and natural gas infrastructure (including LNG and pipelines).
Here’s an interesting twist. Baker Hughes (BH), one of the biggest oilfield services companies on the planet, is investing in a company that designs and builds natural gas-fired electric power plants. But not just any gas-fired power plants. These plants use new technology so that when the natural gas is burned (to produce heat to spin a turbine), there is no, as in zero, carbon dioxide (CO2) emissions. Technology to lower or eliminate CO2 emissions has been available for sometime, but typically has been too expensive. This new tech BH is backing promises to be much lower cost.
The world’s (and North America’s) largest oilfield services companies, including Schlumberger, Halliburton, and Baker Hughes, are all saying the same thing: Drillers are getting ready to drill more this year. Some sub-sectors of the drilling market, like completions, are already “sold out” according to Halliburton. Good luck to drillers who want to add more completions crews right now. Prices are going up for fracking fleets and other services offered by OFS companies.