Hart Energy Unconventional Activity Tracker (Week of Aug. 2, 2021)

Active Rig Count Up 3% in July

The number of active rigs is up 3% on the month and up 94% year-over-year, but the last week did not see any particularly notable changes in major plays, according to Enverus Rig Analytics.

Year-over-year, however, the rig count in major U.S. shale plays is up 50%-250%, Enverus said. The Denver-Julesburg Basin and Gulf Coast Basin increased the most (250% year-over-year).

On the Gulf Coast, the play has gone from 17 active operators a year ago to 45 currently. EOG Resources Inc. has added the most rigs (four). After having no rigs running last July 28, BP Plc, Dunn Exploration Co. LLC, Penn Virginia Corp. and Venture Oil & Gas Inc. have added two rigs year-over-year. Tied with EOG as the most active operator in the play, ConocoPhillips Co. is running four rigs as it was a year ago.

As of July 28, the Powder River Basin has 10 rigs running by seven operators. The most active drillers are Anschutz Exploration Corp., Continental Resources Inc. and EOG Resources at two rigs each. Continental Resources made its return to the basin in late April after closing on its acquisition of Samson Resources II in March.

WTI crude futures in the U.S. were trading around $74/bbl with demand growing faster than supply. Earlier this month, oil prices rose to $76.98, their highest intraday trade since November 2014.

Prices have jumped over 50% this year but in a departure from previous boom cycles, shale producers releasing results this week have hunkered down to their previously stated plans for spending and production to provide greater investor returns by way of buybacks or dividends.

Top U.S. oil producer Exxon Mobil Corp. said its 2021 capital spending is expected to be at the lower end of its prior range but aims for more spending on key projects, including in the biggest U.S. shale basin in the Permian Basin, in the second half of this year.

Meanwhile, Chevron Corp. said it cut its annual capital spending forecast to below last year’s. The second-largest U.S. producer said it expects output from the Permian Basin to be almost same as last year’s, but will add drilling rigs in the second half of 2021.

U.S. oil output could take more than four years to reach pre-pandemic levels, oil producer Hess Corp. said on July 28, sticking to its spending plan despite rising demand to focus on shareholders returns.

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