Permian Basin loses a platform, leaving 235
SCOOP / STACK, Bakken, Utica, DJ each win 1
Oil rigs number from 12 to 405; highest in a year
The number of U.S. oil and gas rigs jumped from nine to 528 in the week ending April 7, drilling data provider Enverus said, as drilling activity declined slightly in the basin. Giant permian but grew in a handful of smaller pools.
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The Eagle Ford Shale in South Texas gained two rigs from the previous week for a total of 43. Oklahoma SCOOP / STACK (19 rigs), Bakken Shale (15) in the North Dakota and Montana, the DJ Basin (14) in Colorado and the Utica Shale (13), primarily in Ohio, each got a platform.
The Permian, located in West Texas and New Mexico, lost a platform during the week, leaving 235.
Horizontal platforms that “move the needle” in terms of US shale production were flat week over week at 420, said Andrew Cooper, quantitative US supply analyst at S&P Global Platts Analytics.
Cooper added that the Permian platforms “appeared to be doing an about-face from the Midland to the Delaware Basin this week,” with some platforms moving from the eastern Permian sub-basin to the western sub-basin.
The majority of rigs added last week were in basins other than the eight largest shale fields and were intended for vertical wells which typically have initial production rates much lower than horizontal wells, Cooper said. . The operators of these basins are generally smaller companies.
Oil rigs at the highest level in one year
Last week was the first time the number of oil rigs crossed the 400 mark since mid-April 2020, when upstream operators dumped rigs after a sharp drop in oil prices in early March. as the pandemic hit the market. The total number of rigs nationwide reached 838 in the first week of March, but fell 67% over the next four months before starting to slowly climb back up.
So far, the US fleet has regained 249 platforms since the fall of March 2000, less than half of the 559 it lost.
Investment bank Goldman Sachs expects the total number of oil and gas rigs in the United States to increase from an additional 65 to 85 rigs by the end of 2021, with the ” more on the rise “in the Permian at an incremental of 35 to 45 platforms from the current number.
The investment bank also sees five to ten more rigs in the Eagle Ford Shale by the end of 2021, three to five more rigs in the DJ-Niobrara, two to three more rigs in the Haynesville shale and one to two additional platforms in the SCOOP / STACK.
According to James West, analyst at Evercore ISI, the planned reduction in drilling for DoublePoint Energy, a small private operator acquired by the public giant Pioneer Natural Resources.
DoublePoint was in a substantial production growth mode (30% / year), but Pioneer plans to reduce the small operator’s seven platforms to five by the end of the year as part of its own growth mode. disciplined by 5% / year. The transaction is expected to close between the middle and end of the second quarter.
“It will be interesting to see how a public enterprise which adopts the discipline of capital absorbs [player] operating under a different set of strategic goals, ”West said in an April 5 investor memo.
2021 looks ‘very good’
Overall, 2021 is shaping up to be “very good” for US E&P companies, said Nicholas Cacchione, analyst at consultancy RBN Energy.
“With the economy expected in recovery mode and travel on the verge of rebounding, the futures markets indicate that oil and gas prices will remain high throughout the year,” Cacchione said in a note from the industry on April 7.
Cacchione expects E&P investments to be flat or slightly lower in 2021 after falling 50% last year, but not necessarily due to lower activity.
Instead, “it underscores the heavy focus that we think E&P will have on costs this year, as the industry has debts to pay off in order to mend balance sheets ravaged by depreciation,” he said. -he declares.
Oil and gas prices lost ground during the week ended April 7, according to data from S&P Global Platts.
WTI prices averaged $ 59.81 / bbl for the week, down 34 cents; WTI Midland averaged $ 60.19 / bbl, down 35 cents; and the Bakken Composite Index averaged $ 59.92 / bbl, down 36 cents.
Gasoline prices at Henry Hub averaged $ 2.39 / MMBtu, down 8 cents, and averaged $ 1.82 / MMBtu in Dominion South, down 2 cents.