U.S. energy firms cut oil rigs for a second week in three, data showed on Aug. 18, with drillers cutting spending plans in reaction to declining crude prices.
Drillers cut five oil rigs this week, bringing the total count down to 763, Baker Hughes, a GE company (NYSE: BHGE), said in its report on Aug. 18. That compares with 406 active oil rigs during the same week a year ago. Drillers have added rigs in 56 of the past 64 weeks since the start of June 2016.
The rig count is an early indicator of future output. U.S. production is expected to rise to 9.4 million barrels per day (MMbbl/d) in 2017 and a record 9.9 MMbbl/d in 2018 from 8.9 MMbbl/d in 2016, according to federal projections.
Those output gains have pressured crude prices lower in recent months, prompting several E&P companies. Those companies and others had mapped out ambitious spending programs for 2017 when they expected U.S. oil prices to be higher than the near $48.50 per barrel range where they are currently trading.
Despite recently announced spending cuts, the E&Ps still plan to spend much more this year than last year.
Recommended Reading
DXP Enterprises Buys Water Service Company Kappe Associates
2024-02-06 - DXP Enterprise’s purchase of Kappe, a water and wastewater company, adds scale to DXP’s national water management profile.
ARM Energy Sells Minority Stake in Natgas Marketer to Tokyo Gas
2024-02-06 - Tokyo Gas America Ltd. purchased a stake in the new firm, ARM Energy Trading LLC, one of the largest private physical gas marketers in North America.
California Resources Corp., Aera Energy to Combine in $2.1B Merger
2024-02-07 - The announced combination between California Resources and Aera Energy comes one year after Exxon and Shell closed the sale of Aera to a German asset manager for $4 billion.
DNO Acquires Arran Field Stake, Continuing North Sea Expansion
2024-02-06 - DNO will pay $70 million for Arran Field interests held by ONE-Dyas, and up to $5 million in contingency payments if certain operational targets are met.
Report: Devon Energy Targeting Bakken E&P Enerplus for Acquisition
2024-02-08 - The acquisition of Enerplus by Devon would more than double the company’s third-quarter 2023 Williston Basin production.