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U.S. drillers add oil and gas rigs for second week in a row -Baker Hughes

05/07/2021 13:03
U.S. drillers add oil and gas rigs for second week in a row -Baker Hughes

By Scott DiSavino

- U.S. energy firms added oil and natural gas rigs for a second week in a row as higher oil prices prompted some drillers to return to the wellpad.

The oil and gas rig count, an early indicator of future output, rose eight to 448 in the week to May 7, its highest since April 2020, energy services firm Baker Hughes Co BKR.N said in its closely followed report on Friday. RIG-USA-BHI, RIG-OL-USA-BHI, RIG-GS-USA-BHI

That put the total rig count 74 rigs, or 20%, higher than this time last year. It was also up 84% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.

U.S. oil rigs rose two to 344 this week, while gas rigs rose the seven, the most in a week since December 2018, the highest since March 2020, to 103.

U.S. crude CLc1 futures were trading around $65 a barrel on Friday, putting the contract up about 34% so far this year after they dropped about 21% last year. O/R

Completions and drilling activity have good momentum after some energy firms raised spending plans for 2021 after cutting over the past two years.

But as the increases have been small with most firms focusing on shareholder returns over volume growth, drilling captivity has been growing moderately.

"Listed companies prefer to preserve cash to improve shareholders returns instead of raising capex as was historically the case with WTI above $60," commodity intelligence company Kpler said.

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 49% in 2020 and 12% in 2019. nL1N2CO27N nL1N2CO16Y nL1N2B23GQ

"Our outlook remains positive ... It is likely that rig count will be near 600 before the end of the year," said James Williams at WTRG Economics in Arkansas.

Enverus, a provider of energy data with its own rig count, said the number of active rigs in the week to May 5 held steady at 524.

Enverus said the most active operator continues to be Pioneer Natural Resources Co PXD.N at 30 rigs (up by 21 year-over-year), which includes nine that were just added through the acquisition of DoublePoint Energy on May 4.

(Reporting by Scott DiSavino
Editing by Marguerita Choy)

(([email protected]; +1 332 219 1922; Reuters Messaging: [email protected]))

For Refinitiv, formerly called Thomson Reuters Analytics, see: cpurl://apps.cp./cms/?pageid=usa-gas
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44 U.S. natural gas inventories: http://tmsnrt.rs/2ewaRk2 For a list of all Baker Hughes rig counts around the world, see: RIG-NOM-BHI For U.S. oil rigs, see: RIG-OL-USA-BHI For U.S. gas rigs, see: RIG-GS-USA-BHI