U.S. shale producer Diamondback Energy on Feb. 23 said the largest U.S.-producing basin could be running some 350 to 400 rigs by the end of the year, up from around 300 currently, as oil prices have climbed to over $90 a barrel.
The company, which plans to keep its Permian oil production flat this year, said output growth is being led by private firms, and more recently oil majors.
As oil activity picks up, many oil drillers are facing higher costs for goods and services, and labor shortages. Diamondback said it was mitigating some of those pressures through operational efficiencies.
"Anything that requires boots or tires in the Permian Basin is going to continue to be tight," CEO Travis Stice told investors on the company's fourth-quarter earnings call.
Shares were up about 2.9% in early trading at $131.75. U.S. crude futures were up 1.7% to $93.50 a barrel.
Diamondback said it did not meet its goal of flaring less than 1% of gross gas produced for the year. It said the shortfall was due to assets it acquired from QEP Resources.
Last week Scott Sheffield, CEO of rival Pioneer Natural Resources, said more needed to be done to reduce flaring in the Permian Basin, and placed the majority of the blame on private firms.
Recommended Reading
Shale Outlook Eagle Ford: Sustaining the Long Plateau in South Texas
2025-01-08 - The Eagle Ford lacks the growth profile of the Permian Basin, but thoughtful M&A and refrac projects are extending operator inventories.
Six New Dean Wildcats Come With 95% Oil in Northern Midland Basin
2025-02-21 - SM Energy reported geologic variability in deposition in the new play in southern Dawson County, Texas, but “it's really competitive.”
PRB’s Sage Butte Ready for M&A Across Lower 48, Maybe Canada Too
2025-01-08 - Private E&P Sage Butte Energy, which operates in the Powder River Basin, is less interested in the Permian Basin, citing the cost of entry.
Birch Resources Mows Dean Sandstone for 6.5 MMbbl in 15 Months
2025-01-06 - Birch Resources has averaged 7 MMboe, 92% oil, from just 16 wells in the northern Midland Basin’s Dean Formation in an average of 15 months each, according to new Texas Railroad Commission data.
DUCs Fly the Coop: Big Drawdowns from the Midland to Haynesville
2025-02-14 - The Midland Basin depleted its inventory of excess DUCs the most last year, falling from two months of runway to one during the past year, according to a report by Enverus Intelligence Research.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.