According to Baker Hughes, U.S. oil rig counts remained near recently experienced three year high levels through the end of June. Jun 29^th week ending U.S. oil rig counts declined 0.5% from the previous week and 0.6% from the three year highs experienced during the week ending Jun 15^th but remained higher on a YOY basis for the 78^th consecutive week, finishing up 13.5%. Jun 29^th week ending crude oil production remained at a record high level however oil production per rig finished near recently experienced seven month low levels. Crude oil production is expected to continue 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

Jun 29^th Oil Rigs Finished Down 0.5% Week-Over-Week but up 13.5% 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

Jun 29^th Weekly Crude Oil Production Remained at a Record High Level

Jun 29^th Crude Oil Production per Rig Finished Near Recently Experienced Seven Month Lows