According to Baker Hughes, U.S. oil rig counts remained near three year high levels through the end of Aug ’18, finishing just 0.8% below the recent highs experienced the week ending Aug 17^th. Aug 31^st week ending U.S. oil rig counts increased 0.2% from the previous week while remaining higher on a YOY basis for the 87^th consecutive week, increasing 13.6%. Aug 31^st week ending crude oil production remained at a record high level however oil production per rig declined from the previous week. Crude oil production is expected to strengthen throughout coming months according to drilling productivity estimates compiled throughout areas accounting for 95% of recent production gains.

Oil Rig Counts Followed Crude Oil Prices Lower but Have Rebounded Since Mid-2016

Oil Rig Counts Peaked in Late 2014, Prior to Declining Sharply in Early 2015

Aug 31^st Oil Rig Counts Increased 0.2% Week-Over-Week and 13.6% YOY

The Declines in Oil Rig Counts Since the Nov ’14 Peak Remain Significant

Declines in Vertical Rigs Remain the Most Significant on a Percentage Basis

Aug 31^st Weekly Crude Oil Production Remained at a Record High Level

Aug 31^st Crude Oil Production per Rig Finished Slightly Below the Previous Week