Rig count increased by 4% in October; E&P companies plan to increase spending.
The rig count in the U.S. is up by 4% in the last month and up 87% year-over-year, according to Enverus Rig Analytics. The largest week-over-week increase by major play occurred in the Permian Basin, where five rigs were added.
Occidental Petroleum has increased its Permian rig count by two since mid-October and has 14 rigs running, making it the second-most active operator in the play. Top Permian driller Pioneer Natural Resources is up by one on the week at 25, with 24 of those in the Midland Basin. This past week Pioneer sold its Delaware Basin position to Continental Resources for $3.25 billion.
WTI crude futures in the U.S. started the week near their highest since 2014 and were currently trading above $81/bbl on Nov. 5 after OPEC+ producers rebuffed a U.S. call to pump more oil. Still, despite oil prices up about 67% so far this year, some energy firms minimally raised spending to increase output in 2021, preferring to focus on boosting cash flow, reducing debt and increasing shareholder returns.
U.S. shale producers’ decision this year to resist pumping more oil even as prices surge could be nearing an end, according to company executives. Several major oil companies, including BP Plc, Chevron Corp. and Exxon Mobil Corp., are planning to increase output or shale spending next year.
U.S. financial services firm Cowen & Co. said the independent E&P companies it tracks plan to increase spending about 4% in 2021 versus 2020, and 11% in 2022 versus 2021 for the dozen or so firms that have already announced estimates for next year.
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