U.S. energy firms this week added oil and natural gas rigs for a second week in a row as relatively high oil prices encourage firms to drill more.
The oil and gas rig count, an early indicator of future output, rose nine to 779 in the week to Nov. 11, its highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report on Nov. 11.
U.S. oil rigs rose nine to 622 this week, their highest since March 2020, while gas rigs held steady at 155.
Even though the rig count increased during most months over the past two years, weekly increases have averaged zero since the start of the pandemic in March 2020. This helped to keep oil production below record levels seen before the pandemic, as many companies focus more on returning money to investors and paying down debt rather than boosting output.
The U.S. Energy Information Administration (EIA) cut its forecast for next year's crude output growth by 21%, days after heads of oil producers warned of persistent inflation and supply chain constraints.
U.S. crude production was on track to rise from 11.3 MMbbl/d in 2021 to 11.8 MMbbl/d in 2022 and 12.3 MMbbl/d in 2023, according to federal energy data. That compares with a record 12.3 MMbbl/d in 2019.
But with oil prices still up about 17% so far this year after soaring 55% in 2021 - and pressure from the government to produce more - several energy firms have said they plan to boost spending for a second year in a row in 2022 after cutting drilling and completion expenditures in 2019 and 2020.
U.S. financial services firm Cowen & Co. said the independent E&P companies it tracks plan to boost spending by about 40% in 2022 versus 2021 (up from 38% last week) after increasing spending about 4% in 2021 versus 2020.
That follows a drop in capital expenditures of roughly 48% in 2020 and 12% in 2019.
Some analysts, however, have noted that even when energy firms do boost their capital expenditures, it was not necessarily to increase production but was instead being spent on more expensive pipes and other equipment and rising labor costs due to soaring inflation and supply disruptions.
2023-01-25 - Arena Energy's acquired interests add to the company's ownership interest in the Eugene Island 330 and South Marsh 128 fields in the U.S. Gulf of Mexico.
2022-12-01 - Expro will provide integrated well services at Apache Corp.'s North Sea locations beginning in the fourth quarter of 2022.
2023-01-13 - The Thunder Horse platform, about 150 miles southeast of New Orleans, can produce up to 250,000 bbl/d of oil and up to 200 MMcf/d.
2022-12-29 - Hart Energy looks at Brazil and Guyana, countries expected to add 3.6 MMbbl/d of production between 2023-2027 with the addition of 21 FPSO units over the five-year timeframe.
2023-01-03 - Energy consultancy Xodus is applying its comparative assessment process as it tackles its most ambitious decommissioning project to date on the UKCS.