U.S. Oil Producers Cut Rigs as Price Declines

Oil pump jacks at work at a drilling site in North Dakota. Producers have been cutting back.
Credit Eric Gay/Associated Press

nytimes.com - by Clifford Krauss - January 7, 2015

HOUSTON — With oil prices plunging at an ever-quickening rate, producers are beginning to slash the number of drilling rigs around the country.

The national rig count had remained surprisingly resilient over recent months even as oil prices dropped by more than 50 percent since June, and it still tops the count of a year ago as domestic production continues to surge.

But an announcement on Wednesday by Helmerich & Payne, the giant contract rig company, that it planned to idle up to 50 rigs over the next month sent shudders through the industry. And that came on top of 11 rigs that it has already mothballed, meaning that in just a few weeks, its shale drilling activity will be reduced by about 20 percent.

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