U.S. energy companies added seven oil and natural gas rigs this week for the first time since February 2021, after crude oil prices soared to new highs.
Baker Hughes Co, an energy services company, reported that the oil and gas rig count, which is an indicator of future output, rose 10-645 in the week to February 18, making it its highest level since April 2020. Baker Hughes stated that this brings the total rig count to 248, or 62% more than it was last year.
U.S. oil and gas rigs increased by four to 522, their highest level since April 2020. Gas rigs grew from six to 124, their largest weekly gain since May 2021.
U.S. crude oil futures rose to close to $96 per barrel this week, their highest level since September 2014.
After soaring 55% in 2020, the combined rig count has increased for 18 consecutive months. This is due to oil prices rising 21% this year.
Analysts noted that U.S. production declined in 2021 due to the fact that many energy companies were more focused on making money for investors than increasing output.
According to the Energy Information Administration, oil production in the Permian, Texas and New Mexico will increase to 5.205 million barrels per daily (bpd), in March.
It is expected that March will see a record 91.7 billion cubic feet per day of gas production in major shale basins.
It said that productivity has fallen in the largest oil and gas basins since records were set for new oil well production per unit of 1,546 barrels per day in December 2020 in Permian, and new gas well production/rig of 33.3million cubic feet per hour (mmcfd), in March 2021 Appalachia.
Many energy companies are announcing that they will increase spending in 2022, after having cut drilling and completion costs in 2019 and 2020.
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 around 23% in 2022 compared to 2021 after increasing spending by approximately 4% in 2021 versus 2010.
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