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Rig count contributing to the great recession in Colorado

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On May 1, 2009, KRDO TV News Channel 13 ABC reported that rig count was dropping in the state of Colorado. Essentially, the story discusses AP news provided by Baker Hughes Inc. - they have been tracking rig counts since 1944 and they indicated that the overall number of rigs actively exploring in the U.S. decreased. The story provides information about the number of oil and gas rigs as well as the drop from year to year.

Maintaining a pulse on rig count from week to week, month to month and year to year is important as a key industry indicator of future supply shortages. From a local stance, more recent updates on rig count have been covered in the May 22, 2009 and June 29, 2009 editions of the Denver Business Journal. Both articles report drastic declines in rig count and drilling applications in the state of Colorado and point to the economy as well as the Colorado Oil & Gas Commission’s recent rules.

I receive a weekly update covering rig count as well as other oil and gas industry updates from Pipe Exchange, a company specialized in coated piping for the oil and gas industry. Anyone can join “Friends in the Oil Patch” for free and receive these weekly updates. At a minimum once per-month the Pipe Exchange will provide a summary in chart format. New updates include market conditions as well as major organization movements within the energy sector.

The oil and gas industry economics for drilling and development of wells is highly dependent on commodity prices and will continue to see low domestic production as a result. Rig count is one way to monitor pricing and economic impact to this industry. 

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