Comeback in US shale a year away: Oil chief

Bloomberg

Even if the economy continues to recover and a second wave of the pandemic is less damaging than the first, US shale drillers may still take at least a year before moving rigs back into the field, according to the leader of an oilfield-services company.
Precision Drilling Corp CEO Kevin Neveu said activity in US shale basins is in for a “prolonged downturn,” with drilling not rebounding until late in the second quarter of 2021 at the earliest, or the end of next year at the latest. That projection assumes governments respond to secondary Covid-19 outbreaks with less drastic measures than they used in recent months.
And if history is any guide, the eventual recovery will be abrupt as drillers respond to a shortage of supply and rising prices, he said.
“By the time our customers get a signal that they need more oil, it’s almost too late,” Neveu said in an interview. “We’ll have to ramp up very quickly and very abruptly. I wouldn’t expect anything different this time.”
Precision Drilling, based in Calgary, has 236 rigs worldwide, with about 110 in Canada, 110 in the US and the balance in other international locations. Currently, only 10
of the company’s Canadian rigs and 26 of its US rigs are operating. During the last oil-price crash that started in 2014, the US rig count tumbled for almost two years, bottoming out at 316 in May 2016.
As prices rebounded, the tally more than doubled within a year and continued climbing to 887 in November 2018.