Do Rig Counts Tell Us Everything We Need to Know?
July 28, 2020
Article by Jeffrey Price
Rig counts are key statistics to indicate activity levels in the upstream oil & gas sector. And, it has plunged thanks to the unfortunate confluence of the O&G Recession and the Great Pandemic Recession. The following Table lays out the severity of the rollbacks across the industry. And, Reeves County and the Delaware Basin were not spared.
![](https://www.1keystone.com/wp-content/uploads/2020/07/RIG-COUNTS-3-1024x227.jpg)
As much as these statistics imply a race to zero, the story is much more complex. For example, permits to drill wells, although down 50% from 2019, are still well in excess of 2016. This is a sign that the commitment to the region is long-lasting. Ditto to the news of Chevron’s planned acquisition of Noble Energy, a leading driller in the Pecos/Delaware Region. Indeed, Noble, crippled by a heavy debt load, was like a wounded animal. And Chevron, large and financially muscular, was easily able to “devour” it. That means the new owner/developer of this world-class acreage will be able to be much more aggressive than the crippled predecessor.
“Bottom Line” is that permit levels are decent and Chevron’s takeover is a shot of adrenaline for the Pecos economy.
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