No, the development rigs are being mothballed too. Not just exploration. H&P's recent rig cut were development rigs. Exploration rigs would have been cut weeks ago, development rigs are just starting to follow.
The decline is just starting to gain momentum, which is what is worrying people. It's only 5% at the moment, but it's expected to accelerate quickly, not gradually. For example:
http://www.nytimes.com/2015/01/08/business/us-oil-producers-cut-rigs-as-price-declines.html?_r=0
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.
Besides, being 5% below this time last year is equivalent to far more than a 5% cut in rigs, because this is a very high growth area. So they've lost all the new capacity planned to be brought on during the year, they'll lose the capacity planned for next year too, and on top of that, they're down 5%.
This is why some analysts are starting to predict that
US oil output will falling by the end of 2015, and that
up to 550 rigs will eventually be mothballed.
Given the extremely rapid decline of shale wells it will really not take much more than a 10% drop in drilling to seriously impact US production rates. A 25% cut would be crippling.
