The seventh week in succession, U.S. drillers added oil and gas rigs – Baker Hughes

Last week, U.S. energy companies added oil and natural gas drilling rigs for the seventh consecutive week amid high prices and government prodding. However, most shale producers prioritized shareholder returns over new production spending.

Baker Hughes Co, an energy services company, reported that the oil and gas rig count, which is an indicator of future output, rose from 7 to 705 in the week to May 6. This was its highest level since March 2020.

Baker Hughes stated that this brings the total number of rigs up to 257 or 57% over last year.

U.S. oil production rose to 557 this week, its highest level since April 2020. Gas rigs grew to 146, their highest level since September 2019.

The U.S. government has been urging drillers to produce more oil to lower domestic prices and to help allies reduce their dependence on Russian energy since the invasion of Ukraine on February 24th.

Although the rig count rose for 21 consecutive months through April, weekly gains have mainly been in the single digits. Oil production remains far below pre-pandemic levels.

According to federal energy data, U.S. crude oil production rose from 11.2 million barrels per hour (bpd), in 2021, to 12.0 million in 2022, and 13.0 million in 2023 to reach a new record of 12.3 million barrels/day (bpd).

This week, top U.S. shale producers reported record-breaking first-quarter profits. Most poured money into higher dividends or share buybacks as oil prices surged to the highest levels in many years.

However, oil prices are up 47% to $110 per barrel so far this year, and after rising 55% in 2021. A growing number of energy companies have stated that they intend to increase capital spending in 2022 for the second consecutive year.

Cowen & Co, a U.S. financial service firm, stated that the independent exploration-production (E&P), companies it tracks have plans to increase spending by approximately 29% in 2022 versus 20,21 after increasing spending by around 4% in 2021 versus 2010.

This is due to a decrease in capital expenditures of approximately 48% in 2020, and 12% in 2019, respectively.

Piper Sandler, an American investment bank, predicted that the total number of U.S. rigs would increase to 684 by 2022 and 783 by 2023. Baker Hughes reports that this compares to an average of 478 in 2021.

According to Baker Hughes data, the annual average number of rigs peaked at 1,919 in 2012. It then fell to a record low of 433 in 2020.


Linking Shareholders and Executives :Share Talk

If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned
Share Talk
Share via
Copy link
Malcare WordPress Security