Total US Drilling Rig Tally Declines: Here's What it Means

Core Insights - The U.S. rig count has decreased, indicating a slowdown in drilling activities within the oil and gas industry [1][3][4] Rig Count Overview - The total U.S. rig count was 600 for the week ended May 24, down from 604 the previous week and significantly lower than 711 a year ago, suggesting reduced drilling activity [3] - Onshore rigs totaled 579, down from 584, while offshore rigs increased slightly to 21 from 20 [4] - The oil rig count remained flat at 497, but is down from 570 a year ago, far below the peak of 1,609 in October 2014 [4] - The natural gas rig count fell to 99 from 103, and is also down from 137 a year ago, representing a 93.8% decrease from the all-time high of 1,606 in 2008 [5] Rig Count by Type - Vertical drilling rigs increased to 20 from 18, while horizontal/directional rigs decreased to 580 from 586 [6] Basin Performance - The Permian Basin, the most prolific in the U.S., maintained a rig count of 312, which is below the prior year's level of 350 [7] Market Outlook - West Texas Intermediate crude prices are above $75 per barrel, but drilling activities are slowing as upstream players focus on shareholder returns rather than increasing output [8] - Energy stocks such as Diamondback Energy, Inc. and Matador Resources Company are highlighted as potential investment opportunities for medium to long-term gains [9] Company Performance - Diamondback Energy reported improvements in average productivity per well in the Midland Basin and anticipates growth in production volumes due to favorable commodity pricing [10] - Matador Resources, with a strong presence in the Delaware Basin, expects a 23% increase in oil production this year, supported by promising oil prices [11][12]