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UPDATE 1-U.S. oil drillers cut rigs for second week in three -Baker Hughes
August 4, 2017 / 5:37 PM / 2 months ago

UPDATE 1-U.S. oil drillers cut rigs for second week in three -Baker Hughes

 (Adds prices, companies and rig forecasts)
    Aug 4 (Reuters) - U.S. energy firms cut the number of oil
rigs for the second in three weeks, slowing the pace of a
15-month drilling recovery, amid plans to spend less in reaction
to declines in crude prices over the past several months.
    Drillers cut one oil rig in the week to August 4, bringing
the total count down to 765, General Electric Co's        Baker
Hughes energy services firm said in its report on Friday.
RIG-OL-USA-BHI
    There were 381 active oil rigs during the same week a year
ago. Drillers have added rigs in 55 of the past 62 weeks since
the start of June 2016.    
    The rig count is an early indicator of future output.
    U.S. crude production in May hit a 16-month high on gains in
Texas and offshore in the Gulf of Mexico, according to federal
energy data this week.             
    Those output gains have pressured crude prices lower in
recent months, prompting several exploration and production
(E&P) companies this week to announce cuts to their future
spending plans, including Devon Energy Corp        
            , Diamondback Energy Inc                      
            , Marathon Oil Corp                      and Rice
Energy Inc                     .
    Those companies and others had mapped out ambitious spending
programs for 2017 when they expect U.S. oil prices        to be
higher than the current $49-per-barrel range.      
    Despite recently announced spending cuts, the E&Ps still
plan to spend much more this year than last year.
    Analysts at U.S. financial services firm Cowen & Co said in
a note this week that its capital expenditure tracking showed
the 64 E&Ps it follows planned to increase spending by an
average of 50 percent in 2017 from 2016.
    That expected increase followed an estimated 48 percent
decline in 2016 and a 34 percent decline in 2015, Cowen said.
    Cowen said the total U.S. count, including both oil and
natural gas rigs, is expected to decline through 2017 and 2018.
Most wells produce both oil and gas.
    The current U.S. oil and gas rig count is 954, according to
Baker Hughes. That compares with an average of 509 in 2016 and
978 in 2015.

    
 (Reporting by Scott DiSavino; Editing by Grant McCool and Paul
Simao)
  
 
 

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