In the last 12 months, the number of active rigs operating on land in the United States has dropped significantly.
That’s due to two factors. One is that oil and gas companies are reeling from plummeting commodity prices. The other is that drillers have become more efficient at tapping shale formations. They can extract more oil and gas with fewer rigs.
Still, it’s been a tough year, marked by exploration and production companies scaling back drilling plans and announcing layoffs. It’s hit the smaller players, like Cecil-based Consol Energy and State College-based Rex Energy, as well as energy giants like Chevron, and oilfield service companies Halliburton and Schlumberger.
As of Friday, the national oil rig count shed just shy of 1,000 rigs in the last 12 months. Meanwhile, the number of rigs targeting natural gas has dropped by 170, according to Baker Hughes Inc.
Some more pain may be in store for 2016. Moody’s Investor Services expects “a prolonged period of oversupply will keep oil prices lower for longer and continue to pressure issuers in the oil and gas industry in 2016, particularly those in the exploration & production and drilling and oilfield services sectors.” The rating agency is maintaining its negative outlook on these sectors.