U.S. energy firms this week added oil and natural gas rigs for the fifth time in six weeks although growth in the rig count over the past few months has slowed as drillers continue to focus on capital discipline despite firmer oil prices.
The oil and gas rig count, an early indicator of future output, rose three to 491 in the week to Aug. 6, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The total rig count was up 244 rigs, or 99%, over this time last year. The count has more than doubled since falling to a record low of 244 during the week of Aug. 14, 2020, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose two to 387 this week, while gas rigs held steady at 103. There was one miscellaneous rig added.
Enverus, a provider of energy data with its own closely watched rig count, said the number of active rigs increased by seven in the last week to 566 as of Aug. 4.
Enverus said the most active U.S. operators were currently Pioneer Natural Resources Co (23), EOG Resources Inc (18), ConocoPhillips (16) and Mewbourne Oil (16).
Pioneer, the largest producer in the top U.S. oilfield in the Permian Basin, this week forecast tepid shale growth in coming years.
Pioneer Chief Executive Scott Sheffield anticipates output in the Permian basin to grow roughly 5% – in line with his own company’s planned production increases – over the coming years, while other basins will be flat or face declines, he said during a second-quarter conference call.
U.S. crude futures were trading around $68 a barrel on Friday, putting the contract down about over 7% this week due to worries that rising coronavirus cases will hurt oil demand.
Even though oil prices were over 40% higher so far this year, most energy firms remain focused on returning capital to investors. Some, however, are raising spending in 2021 after cutting drilling and completion expenditures over the past two years.
U.S. financial services firm Cowen & Co said the independent exploration and production (E&P) companies it tracks plan to increase spending about 1% in 2021 versus 2020. That follows capex reductions of roughly 48% in 2020 and 12% in 2019.
Many analysts, however, expect that extra spending will only replace natural declines in well production.
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