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US oil, gas rig count drops by eight on week to 1,090: Platts Analytics

The US oil and gas rig count dropped by eight week on week Thursday to 1,090, resuming a five-month general downward trend even as oil prices remained in the low $60s/b, according to S&P Global Platts Analytics.

Oil rigs dropped by 10 to 867, while gas-directed rigs rose by one to 220. Rigs not classified as either oil or gas also declined.

Since mid-November, the US rig count has gradually declined, falling by 143 rigs from its recent peak of 1,233 as capital budgets inched down in the wake of oil price uncertainty and promises by oil companies to return more cash to shareholders.

WTI NYMEX oil prices reached around $75/b briefly in early October 2018 before they too began sifting down. By year-end they had briefly reached around $45/b before they began rising.

This week, five of the named eight US unconventional basins dipped by at least one rig. The SCOOP-STACK basin in Oklahoma fell by three rigs to 84 and the largely gas-prone Utica Shale, mostly in Ohio, dropped by two rigs to 13.

Also, the Eagle Ford Shale in South Texas, the Bakken Shale in North Dakota and Montana and the Denver-Julesburg Basin in Colorado each fell by one rig. This left the Eagle Ford with 89 rigs, the Bakken with 60 rigs and the DJ Basin with 31 rigs.

But the Permian Basin in West Texas and New Mexico picked up a rig, to total 470, as did the gas-prone Haynesville for a total of 64. The big Marcellus Shale, also largely gas-oriented, was unchanged week on week at 65.

The Permian is the largest producing basin in the US, with total oil production nearing 4.2 million b/d and gas output of about 14 Bcf/d.

Scott Sheffield, CEO of Pioneer Natural Resources, which was one of the earliest upstream operators to drill horizontal wells in the basin, said Wednesday at the annual Columbia Global Energy Summit in New York that he believes Permian oil production ultimately will reach 8 million b/d.

“Last year about 65% of the US’ [total oil growth of around 1.8 million b/d] came from the Permian,” Sheffield said. “That will move to 75-80% of total growth in the future.”

“We passed Ghawar recently,” he said, referring to the Saudi conventional producing oil field that, until now, had held the title of the world’s largest such field.
Source: Platts

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