U.S. energy firms this week added oil and natural gas rigs for the first time in 10 weeks, due to the biggest weekly increase in gas rigs since October 2016, energy services firm Baker Hughes Co said in its closely followed report on July 7.
The oil and gas rig count, an early indicator of future output, rose six to 680 in the week to July 7. Despite this week's rig increase, Baker Hughes said the total count was still down 72 rigs, or 10%, below this time last year.
U.S. oil rigs fell five to 540 this week, their lowest since April 2022, while gas rigs rose 11 to 135, their highest since early June.
Data provider Enverus, which publishes its own rig count data, said drillers cut four rigs in the week to July 5, reducing the overall count to 732. That put the total count down about 10 rigs in the last month and down 13% year-over-year.
U.S. oil futures were down about 9% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 43% so far this year after rising about 20% last year.
The weekly gas rig count hike was unusual as the massive drop in gas prices has already caused some companies to reduce production by cutting rigs—especially in the Haynesville shale in Arkansas, Louisiana and Texas.
Despite some plans to lower rig counts, the independent exploration and production companies tracked by U.S. financial services firm TD Cowen were on track to boost spending by about 19% in 2023 versus 2022 after increasing spending about 40% in 2022 and 4% in 2021.
That increased spending will help keep U.S. crude production on track to rise from 11.9 million barrels per day (bbl/d) in 2022 to 12.6 million bbl/d in 2023 and 12.8 million bbl/d in 2024, according to projections from the U.S. Energy Information Administration (EIA) in June. That compares with a record 12.3 million bbl/d in 2019.
U.S. gas production, meanwhile, was on track to rise from a record 98.13 billion cubic feet per day (Bcf/d) in 2022 to 102.74 Bcf/d in 2023 and 103.04 Bcf/d in 2024, according to EIA's projection.
Recommended Reading
Matador Resources Increases Quarterly Dividend 33%
2023-10-20 - Matador Resources’ board of directors increased its quarterly cash dividend 33% to $0.20 per share of common stock per quarter beginning in fourth quarter 2023.
Chord Energy Goes Long: Bakken E&P Investigating Four-mile Laterals
2023-11-07 - With the continued success of its three-mile lateral wells, Williston Basin operator Chord Energy reported higher-than-expected production volumes in the third quarter and is exploring even longer horizontal drilling.
Following Acquisitions, Patterson-UTI Focused on Integration
2023-11-13 - Patterson-UTI CEO Andy Hendricks is optimistic about rig recovery in 2024, and he says frac fundamentals remain strong.
SLB’s International Business Carries Q3 Revenue
2023-10-23 - SLB’s international businesses picked up the slack to replace the lack of revenue from North America due to slower drilling activity in the U.S. and Gulf of Mexico.
Sitio Royalties to Exit Appalachia, Anadarko Basins
2023-11-09 - Sitio Royalties reported that it was selling its “lower-margin” assets in the Appalachia and Anadarko basins and also closed additional Permian Basin acquisitions.