BH Rigs: Moving sideways again

  • Oil rigs declined, -2 to 860
  • Horizontal oil rigs gained, +1 to 766
  • The 4 wma change for horizontal oil rigs fell to -1.0 / week
  • Horizontal oil rigs have gone exactly nowhere in the last 12 weeks
  • Frac spreads finally saw some life, up 9.
  • The frac spread ratio is still very low at 57.3%, versus an normal value around 61.7%.   This implies further build in DUCs and potentially more downward pressure on oil rig counts.
  • The breakeven oil price to add horizontal oil rigs continues to creep up, now around $74 WTI.  This is a good bit higher than the current price around $67.
  • Equities, now suffering from Permian bottlenecks, look cheap.

Baker Hughes Rigs Week of Sept. 7, 2018