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U.S. oil rigs in service rose 7 this week with U.S. oil production at 11.40 million bpd and oil prices consolidating between $65 and $75. US Natural gas rigs remained flat. US natural gas prices at 3 year highs and 10 year highs in Europe all eyes are production numbers.

Shale Basins EIA

The U.S. natural gas rig count held steady at 104 during the week ended Friday (July 23), while a ramp-up in oil drilling the US added seven units to 491, according to the latest data from oilfield services provider Baker Hughes Co. (BKR).

The 491 active U.S. rigs as of Friday compares with 251 rigs in the year-ago period, according to the BKR figures, which are based partly on data from Enverus.

US Oil Rigs

  • Land drilling increased by seven rigs week/week to 387,
  • Gulf of Mexico count unchanged at 17.
  • Horizontal rigs increased by five overall to 439
  • Directional rig added one rig to 33
  • Vertical rigs also added one rig to 19

US Natural Gas Rigs

  • Natural gas rigs unchanged at 104

Broken down by major play, the Permian Basin posted a net increase of four rigs week/week, raising its total to 242, versus 126 in the year-earlier period. Also among plays, the Ardmore Woodford and Granite Wash each added a rig, while the Haynesville Shale dropped one unit from its tally.

Broken down by state, Texas saw its tally jump six units higher to 228, up from 103 at this time a year ago. Utah added two rigs overall for the period, while Oklahoma added one. On the other side of the ledger, Louisiana saw a net decline of two rigs week/week, lowering its count to 52, versus 30 in the year-ago period, the BKR data show.

BHI 7 23 21

Canada Oil Rigs

  • Oil rigs down 1 to 93

Canada Oil Rigs

  • Natural gas rigs unchanged at 55

The Canadian rig count eased one unit lower overall, falling to 149, with oil-directed drilling accounting for the net decline. Canada  is up 100 units ahead of 49 rigs a year ago.

Earnings

In its 2Q2021 earnings report from Halliburton the company reported a 12% sequential increase in revenue for its North America business. Halliburton’s North America business saw revenue rise to $1.6 billion, driven by higher pressure pumping services, drilling-related services and wireline activity on land.

Gulf of Mexico well construction activity was also higher during the quarter, management said. “With commodity prices remaining supportive, we believe activity in North America inches higher, with drilling outpacing completions as operators build up well inventory for 2022,” CEO Jeff Miller told investors earlier in the week.

Miller said the company sees itself “in the early innings of a multi-year upcycle. For the first time in seven years, we anticipate simultaneous growth in international and North America markets.”

U.S. oil and gas production continues underscores the efficiency of the drilling rigs. We will look to see if rigs rise per companies plans at their last earnings guidance with natural gas and oil prices at significant three year plus highs. Based on the historical relationship with WTI prices, the move is likely to gain traction in the short term Shale production has been lifted by the smaller niche producer and majors like ExxonMobil

Prior to the pandemic  Exxon CEO Darren Woods said $XOM is diverting about one-third of its drilling budget this year to shale fields that will deliver cash flow in as little as three years. The Texas Permian basin is the epicenter of activity. Plainly stated the shale industry is responsible for 100% of the growth.

There are seven main shale oil producing regions in the US. Two of the biggest are Eagle Ford and the Permian Basin. Both of them are in Texas with the latter stretching over to New Mexico. These two are responsible for two-third of the country’s shale output and 45% of the total US production.

Source: Baker Hughes, TradersCommunity, OPEC

From The TradersCommunity News Desk

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