Rig count increase for fourth straight week
According to Enverus Rig Analytics, the rig count is up 8% in the last month but down 52% year-over-year. The Permian added four rigs, while the Anadarko, D-J and Gulf Coast basins were each down one or two rigs week-over-week. The Appalachia Basin also added a rig.
In Colorado, there are roughly 4,300 active permits to drill new wells in the Centennial State, but it doesn’t appear that operators are rushing to drill those wells before the state’s new setback rules take effect Jan. 15. On that date, new wells will have to be at least 2,000 ft from occupied structures, and any undrilled permits will have to be resubmitted under the new rules. All D-J rigs currently running are in rural Weld County.
Permian rig activity is up by 20 in the last month. The largest gains were in Lea County, New Mexico (up eight to 35), and Reagan County, Texas (up four to seven). Pioneer Natural Resources accounts for half of the Reagan increase, adding two rigs for a total of three in the county. EOG added the most in Lea County in the last month, increasing its count there by three to reach 10.
U.S. crude traded around $49/bbl this week, which is the highest WTI has traded since February.
Even though the oil contract was down about 20% since the start of 2020, it was still up about 160% over the past eight months on hopes global economies and energy demand will return as more governments relax coronavirus lockdowns.
Still, most energy firms have said they plan to cut spending in 2020 and 2021 as they continue to focus on improving earnings rather than just boosting output.
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