Newspaper article THE JOURNAL RECORD

Predictions on Direction Rig Count Is Headed Differ/will Average 1,100 in 1987, Says Outlook

Newspaper article THE JOURNAL RECORD

Predictions on Direction Rig Count Is Headed Differ/will Average 1,100 in 1987, Says Outlook

Article excerpt

1987 is expected to be a better year than 1986 for the oil and gas industry, because less money will be needed to service debt and will be available for drilling, according to an outlook report by Petroleum Information of Denver.

For 1987, the active rotary rig count is expected to average 1,100, enough to produce approximately 40,000 wells for 1987, said the report by Tom Dougherty, industry affairs consultant for Petroleum Information. The seismic crew count could reach an average of 225, he said.

The average rig count in 1986 was 964, according to Hughes Tool Co. That was the lowest average active rotary rig count since Hughes Tool Co. began keeping records.

The average seismic crew count in 1986 was 1977, the lowest since 1970. The total well completions was the lowest since 1974, said the report.

The latest U.S. rig count was 806 last week, according to the International Association of Drilling Contractors of Houston. In Oklahoma, the latest count was 120.

"If the conditions to produce even this sort of improvement really do prevail," said Dougherty, "then we may expect further progression of crude prices (per barrel) to a point in the mid-$20s by mid-1988.

"But 1986 was so dismal that substantial improvement could be made without approaching the levels deemed to be desirable."

The debt servicing of operators in 1986 utilized a higher-than-usual percentage of cash flow in an attempt to hang on in the face of lower oil and gas prices and diminishing gas markets, Dougherty said.

This cash flow normally would be used to drill additional wells, he said.

Proof that companies are using internal cash flow to service their debts can be found in the disparity between drilling activity and wellhead value, Dougherty said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.