Today, a Mike Filloon update: rig counts matter little, as horizontal wells have changed how we predict future production.
Summary:
- Given the large differences in oil and natural gas production depending on geography and well design, rig counts do little to predict future production.
- Rigs specific to horizontal drilling in the Permian, Eagle Ford, Bakken, and STACK are under the greatest demand
- Rigs have moved to the best core areas, and now operators have switched from exploration to development mode, drastically improving production per rig
- Higher tech rigs and better techniques have decreased the time needed per well, so more wells can be drilled per rig
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