May 4, 2018 / 5:34 PM / 5 months ago

UPDATE 1-U.S. drillers add oil rigs for fifth straight week -Baker Hughes

 (Adds Permian rigs in paragraphs 3-4)
    By Scott DiSavino
    May 4 (Reuters) - U.S. energy companies added oil rigs for a
fifth week in a row as they follow through on plans to spend
more on drilling this year with higher crude prices boosting
their profits and pushing  nationwide production to record
highs.
    Drillers added nine oil rigs in the week to May 4, bringing
the total count to 834, the highest level since March 2015,
General Electric Co's        Baker Hughes energy services firm
said in its closely followed report on Friday. RIG-OL-USA-BHI
    More than half the total oil rigs are in the Permian basin
in west Texas and eastern New Mexico. Active units there
increased by six this week to 458, the most since January 2015.
    The U.S. government expects oil output in the Permian to
rise to a record high near 3.2 million barrels per day in May,
about 30 percent of total U.S. oil production.             
    The U.S. rig count, an early indicator of future output, is
much higher than a year ago when 703 rigs were active as energy
companies have been ramping up production in tandem with OPEC's
efforts to cut global output, in a bid to take advantage of
rising prices. 
    U.S. crude futures        traded near $70 a barrel this
week, their highest since November 2014. That is up sharply from
the $50.85 average hit in 2017 and $43.47 in 2016.
    Looking ahead, futures were trading around $69 for the
balance of 2018           and $63 for calendar 2019          .
    U.S. financial services firm Cowen & Co last week said 58 of
the roughly 65 exploration and production (E&P) companies they
track have already provided guidance indicating an 11 percent
increase this year in planned capital spending.
    Cowen said those E&Ps that have reported capital plans for
2018 expected to spend a total of $80.5 billion in 2018, up from
an estimated $72.4 billion in 2017.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, last week forecast average total
oil and natural gas rig count would reach 1,015 in 2018 and
1,130 in 2019.
    So far this year, the total number of oil and gas rigs
active in the United States has averaged 980, up sharply from 
an average of 876 rigs in 2017 and on track to be the highest
since 2014, which averaged 1,862 rigs. Most rigs produce both
oil and gas.
    Shale oil producer Pioneer Natural Resources Co         said
it is considering adding more Permian drilling rigs later in
2018 and is likely to increase next year's capital budget, which
was previously forecast at $2.9 billion.             
   Continental Resources Inc        , one of the most-prolific
U.S. shale companies, posted a better-than-expected quarterly
profit on Wednesday, thanks to rising oil prices and spiking
output in its core North Dakota Bakken shale operations.
            
    For the second consecutive quarter, Continental bested rival
Whiting Petroleum Corp         to be the largest oil producer in
the Bakken, even as Whiting's output rose over 8 percent in the
first quarter.             
    Apache Corp         raised its full-year U.S. output
forecast to 250,000-258,000 barrels of oil equivalent per day
from a previous range of 245,000-255,000 boepd, driven mostly by
more operating wells in the first quarter.             
     The U.S Energy Information Administration on Monday said
U.S. oil production jumped to a record high 10.3 million barrels
per day (bpd) in February.             

    
 (Reporting by Scott DiSavino
Editing by Marguerita Choy)
  
 
 
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