The US oil rig count dropped 5 last week to 747, but continues to track the lagged WTI price...

This week saw US crude production rebound from weather-related slowdowns, but has notably decoupled from the lagged rig count...

Leading to the question, as OilPrice.com's Irina Slav asks, is the rig count still relevant?

The weekly rig count report that Baker Hughes releases is probably on everyone’s not-to-miss schedule. However, its days as one of the most reliable U.S. oil industry growth metrics seem to be numbered: the shale industry has advanced beyond rigs.

Just a few years ago, the number of rigs was conclusively indicative of oil production growth: more rigs equaled more oil. But over the past couple of years, forced by low prices, drillers have sought and found other ways to increase production without adding more rigs. That’s why in recent months production figures and Baker Hughes rig counts have sometimes been in conflict: rigs falling and production growing, or rigs flat but production still growing.

The reason for the confusion is that drillers have learned how to boost production from one single well without adding more rigs. They have learned to make longer laterals—the horizontal part of the well in the shale rock—and they have learned to pump more sand and chemicals into these laterals.

This has become a problem for analysts: if you can’t trust the rig count report, what should you trust? Fortunately, in the tech era there is no shortage of data. So, analysts are now watching the length of the laterals, the frac sand quantities used per well, and the frac stages per well to gain the insight they need to predict future developments. There is even something called a frac spread count – counting fracking equipment. Basically, analysts are now counting everything around the well that can be counted, including frac crew hiring numbers in the shale plays.

While most of these metrics are indeed useful in painting a picture of the shale industry, one could be tricky: the length of the laterals. A December story by Bloomberg’s David Wethe warned that horizontal wells are becoming too long and retrieving the oil and gas from them is becoming more difficult and less efficient. Wethe compared trying to pull oil and gas from these long laterals to “trying to slurp a thick chocolate shake through a J-shaped straw four miles long.”

To date, the average length of the lateral part of a fracked well is 7,500 feet, Wethe writes in a more recent story. That’s about 50 percent longer than the average lateral length was three years ago. But the pumps that bring the crude and the gas to the surface are still pretty much the same as they were not just three, but ten and twenty years ago. These pumps are now having a problem that is costing drillers.

This problem is that pumpjacks cannot retrieve as much oil from the superlong laterals, which means that lateral length is not a reliable metric of production. So, how reliable are the other metrics? Well, given that frac sand use has been growing consistently and that the link between the amount of proppants used and the amount of oil and gas produced is a straightforward one, the answer for frac sand would be: “pretty reliable.”