Exxon Mobil Corp. has made major strategic moves to gain a significant position in the Permian Basin. The market awaits the results.
U.S. rig count is at the lowest level it’s been since December 2016. Oil futures down more than 50% since the beginning of 2020 as Saudi Arabia and Russia cut prices and boosted output in a battle for market share.
This week, and just like that, the rig cascade got underway. Hart Energy’s Unconventional Activity Tracker fell 49 units over the last week, or seven rigs per day.
We’ve entered the Tom Petty zone of rig count decline. Talk to drilling contractors and they report business is Free Falling, Free Falling. Tight formation rig count dropped 39 this past week, including 22 in the Permian, five in the Eagle Ford and six in Oklahoma’s Anadarko Basin.
The hurricane of in-field activity cutbacks is moving toward landfall. Hart Energy’s Unconventional Activity Tracker fell 11 units, or 2%, this past week led by a nine-unit decline in the Permian Basin. Rig count declines were recorded in most of the major plays although the Marcellus and Utica held steady at zero change versus last week. That story was also true for the liquids-rich plays, and the traditional dry gas plays.
This week’s rig count produced a false positive, essentially reporting the activity level in effect shortly before oil markets cratered from the OPEC + dissolution and the ensuing draconian retrenchment in E&P 2020 capex.
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