Oilfield Services

U.S. day rates flat but surveyed drillers downplay prospects

byJoseph Gyure, Editor, Enverus Intelligence

The U.S. composite day rate slipped just $2 lower in July to $22,921, according to the Enverus Day Rate Survey. While the miniscule decline was a dramatic change from June’s $308 plummet, an immediate recovery seems unlikely, as drillers surveyed in July were much more likely than June respondents to see stagnating rig demand.

Roughly 86% of July respondents said bid inquiries were decreasing or steady compared with three months ago, versus 36% in the June survey. Drilling rigs have already been hired and are on contract for the high summer drilling season. This could be as good as it gets for U.S. drilling activity as Q4 and its typical seasonal slowdown awaits.

us-composite-day-rates-by-rig-class

More than three-fourths of day rate survey respondents expect the same amount of work during the next six months, though some are questioning the effect recent consolidation among E&P clients will have on future drilling plans. Q2 saw just over $30 billion in upstream M&A transactions, continuing a remarkable consolidation run that started in 2H23 and has seen about $250 billion transacted in the last 12 months. The M&A wave is not concentrated in just one basin, either; Permian deals accounted for less than 10% of value in 2Q24 compared with more than 50% in 1Q24 and 4Q23.

“Acquisitions are probably the biggest reason the number of bids we are getting are decreasing,” a Rockies driller told the survey team. The Rockies were the location of the biggest transaction in July—Devon Energy’s $5 billion acquisition of Williston Basin-focused Grayson Mill Energy LLC, an EnCap Investments LP portfolio company.

The average day rate in five of the seven regions in the Enverus Day Rate Survey gained ground sequentially in July, ending a three-month stretch of all seven regions declining. July gains were modest, however, ranging from $11 to $50, while the Ark-La-Tex fell by $112 and the Mid-Continent fell by $116. The losers more than offset the winners, sending the U.S. composite lower.

The $2 dip means the U.S. composite has fallen for six consecutive months, but the other regions’ July gains leave the Ark-La-Tex as the only region that has fallen six straight months; the Mid-Continent had a small increase in March. The Ark-La-Tex has also lost the most dollar value over the past six months, down $1,583 since January to its $23,182 July result.

The Gulf Coast has fallen the most by percentage since January, down 6.41% compared with the Ark-La-Tex’s 6.39%. It would have had the deepest dollar cut had it not risen $11 in July. “We see the rig market improving as people are signing contracts and getting in line,” a Gulf Coast driller told the survey team.

Appalachia continues to be an outlier as July’s top gainer, rising $50 to $21,952. The region has only lost $233 since January, a 1.05% decline compared with the national composite’s 4.12% drop. “We are seeing bid requests increase in our area because the number of customers is increasing,” an Appalachia driller told the survey team.

us-composite-day-rate-variance-by-rig-class

Higher-power drilling rigs are consistently performing better than their lower-power counterparts. In all of the survey’s seven regions, Class D rigs (1,500-1,999 hp) have fallen less YOY than Class C rigs (1,000-1,499 hp). In South Texas, the Class C rigs’ average of $28,946 is 6.53% lower than in July 2023, while the Class D average of $32,847 is down just 1.65%. In sequential results, five of the seven regions saw Class D fall by less in percentage than Class C. The U.S. composite day rate for super-spec rigs rose $393 from June to $30,250, its highest reading since last September.

To see the full results of the Enverus Day Rate Survey for July, check out the latest issue of Oilfield Pulse.

About Enverus Intelligence Publications

Enverus Intelligence Publications presents the news as it happens with impactful, concise articles, cutting through the clutter to deliver timely perspectives and insights on various topics from writers who provide deep context to the energy sector.

Picture of Joseph Gyure, Editor, Enverus Intelligence

Joseph Gyure, Editor, Enverus Intelligence

Joseph Gyure has covered midstream and oilfield services since 2017 and joined Enverus from PLS. He previously worked at ICIS, the Houston Chronicle, and the Waco Tribune-Herald. Joseph is a graduate of the University of Texas at Austin.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

nuclear-worker
Energy Transition
ByAmyra Mardhani

The rapid growth of AI has created a surging demand for data centers. Tech giants like Microsoft, Google and Amazon are seeking reliable, low-carbon electricity to power future data processing hubs.

risk-manager-sector
Trading and Risk
ByChris Griggs

Are you struggling to find reliable, transparent benchmarks for your energy trading and analytics? Do you often face challenges in accessing consistent pricing data that is compliant with industry standards?

minerals-management
Minerals
ByPhillip Dunning

Discover EnergyLink’s new platform to manage mineral ownership with ease. Track royalties, payments, and land activity—all in one place. Take control of your mineral assets!

Enverus Intelligence Research Press Release - EIR: Density drives steepening declines in U.S. shale
Analyst Takes Intelligence
ByAl Salazar, Enverus Intelligence® | Research (EIR) Contributor

The following blog is distilled from an interview on the CBC’s “The Eyeopener,” hosted by Loren McGinnis who interviewed Enverus Intelligence® Research’s very own Al Salazar. Click here to listen to the full radio segment. With Brent hovering around $75,...

energy-transition
Energy Transition
ByAdam Robinson, Enverus Intelligence® | Research (EIR) Contributor

With the recent surge of renewable fuel adoption in California, we have analyzed and updated our long-term price forecast for low carbon fuel standard (LCFS) credits using the latest two quarters of the California Air Resources Board (CARB) data.

energy-transition
Energy Transition
ByBrynna Foley

Over the last century, power demand and supply have been unmistakably intertwined. However, with the addition of variable renewable power this is no longer the case.

Serious-nature-topics-man-1
Intelligence
ByChris Griggs

Explore the contrasting energy policies of Kamala Harris and Donald Trump and their potential implications on the U.S. and global energy sector. From renewable energy shifts to hydrocarbon strategies, understand how the 2024 election outcomes could reshape the industry. Watch...

Enverus News Release - Banking on Buzios’ oil supply
Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

Insurance companies are largely backing away from fossil fuel investments, but two major exceptions, Berkshire Hathaway and State Farm, have reportedly increased their holdings so much that they skewed the entire sector’s results.

Enverus Press Release - Seeing the ceiling: Maximizing output for today’s natural gas-fired grid
Midstream
ByAndrew Dittmar

Explore how NGLs are fueling North America's midstream merger momentum, driving operational synergies, and positioning companies for future growth.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert