Lower Rig Count, But More Drilling in 2013 - Schlumberger - Halliburton

Drilling Rig Image
Drilling Rig Image

In the company's fourth quarter conference call, Schlumberger (SLB) executives stated they expect the active rig count will fall from the 2012 average, but there will be more wells drilled. SLB reviews its outlook for North America in its conference call each quarter. The company does expect the liquids rig count to increase in the first half of the year, but does not expect much if any recovery in natural gas drilling.

Paal Kibsgaard, CEO, stated, "But if you look at our view on 2013 for North America, we expect the U.S. land rig count to be up between about 100-150 rigs in Q1, and this is based on the feedback from our customers. Now in terms of activity for the full year, we still see U.S. land rig count slightly down versus 2012, while the well count will be slightly up."

Halliburton is also expected to echo the same sentiment in its call today. The following statement was included in the company's press release:

“In 2013, we anticipate the North America rig count will improve from fourth quarter levels but will be down slightly compared to 2012."

Other notable items from the SLB call include:

  • Expects the liquids rig count to bounce up in the first quarter of 2013
  • Do NOT see a significant recovery in dry-gas drilling in 2013
  • Natural gas production remains strong
  • Hydraulic fracturing pricing is not expected to increase in 2013

As you hear locals begin to discuss rigs moving out of your area. Remember, a lower rig count does not mean there will be fewer wells drilled. Operators get more efficient over time and need fewer rigs to develop their acreage.