US drillers cut oil and gas rig count to lowest

The US energy firms this week cut the number of oil and natural gas rigs operating to the lowest since January 2022, reported energy services firm Baker Hughes in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by four to 590 in the week to June 14, 2024. That puts the countdown for the second week in a row.

Baker Hughes said the total rig count is down 97 rigs, or 14%, below this time last year. Oil rigs fell by four to 488 this week, also their lowest since January 2022, while gas rigs were unchanged at 98, which was the lowest since October 2021.

In Texas, the state with almost half of the country's active rigs, the total count slid by 2 to 285, the lowest number of rigs operating in the state since January 2022.

The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output.

The US oil futures were up about 10% so far in 2024 after dropping by 11% in 2023, while US gas futures were up about 15% so far in 2024 after plunging by 44% in 2023.

The increase in oil prices should encourage drillers to boost US crude output from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.7 million bpd in 2025, according to the latest US Energy Information Administration (EIA) outlook.

Even though gas futures were trading higher now, several producers reduced spending on drilling activities earlier in the year after prices drop to 3-1/2-year lows in February and March.

The drilling decline should cause US gas output to slide to 102.1 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023, according to the EIA.

 

US weekly oil and gas rig count falls by the most since February this year

US energy firms cut the most oil and natural gas rigs in a week since February this year, energy services firm Baker Hughes Co. said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by seven to 748 in the week to May 05, 2023.

Despite this week's rig decline, Baker Hughes said the total count was still up 43 rigs, or 6%, over the same period last year.

Oil rigs fell by three to 588 this week, in their biggest weekly decline since March. Gas rigs fell by four to 157, their biggest weekly decline since February.

US oil futures were down about 11% so far this year after gaining about 7% in 2022. US gas futures plunged about 52% so far this year after rising about 20% last year.

That drop in gas prices helped cause the number of rigs active in the Haynesville basin in Arkansas, Louisiana and Texas, the nation's third biggest shale gas field, to fall this week to 62, the lowest since March 2022, according to Baker Hughes.

US oil and gas production grew rapidly in the first two months of 2023 – a delayed response to the high prices and upturn in drilling that characterized much of last year following Russia’s invasion of Ukraine.

But growth is set to decelerate sharply as the more recent slump in prices curtails new drilling and well completions, with the impact evident by the fourth quarter of 2023.

This week, Chesapeake Energy Corp, EOG Resources and APA Corp said they could delay some well completions or ramp down drilling due to weak prices.

Shale producer Diamondback Energy noted rig prices are falling and steel costs are set to decline by about US$20 to US$25 per foot, a sign the inflationary pressures that plagued the oilfield in the past year are easing.

 

 

United States oil and gas rigs count witnesses first quarterly fall since 2020

The United States energy firms this week cut the number of oil and natural gas rigs, with the quarterly count dropping for the first time since 2020, energy services firm Baker Hughes said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by three to 755 in the week ended March 31, 2023. Despite this week's rig decline, Baker Hughes said the total count was still up 82 rigs, or 12%, over this time last year.

US oil rigs fell one to 592 this week, while gas rigs decreased two to 160.

For the month, the total oil and gas rig count rose two rigs, the first monthly increase since November last year.

For the quarter, the total oil and gas rig count fell by 24 rigs, the first quarterly decline since the third quarter of 2020.

US oil futures were down about 6% so far this year after gaining about 7% in 2022. US gas futures have plunged about 51% so far this year after rising about 20% last year.

The drop in gas prices has already caused some exploration and production companies, including Chesapeake Energy, Southwestern Energy and Comstock Resources, to announce plans to reduce production by cutting some gas rigs.

US field production of crude oil rose in January 2023 to 12.46 million barrels per day (bpd), the highest since March 2020, Energy Information Administration (EIA) data shows.

Gross natural gas production in the US Lower 48 states jumped by 2.9 billion cubic feet per day (bcfd) to 112.3 bcfd in January, the most since hitting a record 112.4 bcfd in November 2022, the EIA said.