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Aug 5 (Reuters) – U.S. energy companies have cut oil rig counts the most since September this week, with output gradually rising as energy firms boost shareholder returns and face higher operating costs high due to inflationary and supply chain pressures.
The number of oil rigs, an early indicator of future production, fell by seven to 598 in the week to August 5, the first weekly drop in 10 weeks, energy services firm Baker Hughes Co said. (BKR.O) in its closely followed report. Friday. , ,
Gas rigs rose by four to 161, their highest level since August 2019, while oil and gas combined fell by three to 764, bringing the total number of rigs to 273, or 56 %, compared to the same period last year, said Baker Hughes.
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Even though total rig count rose for a record 24 months through July, weekly increases were mostly single digits and oil production is only expected to return to pre-pandemic record highs. next year. Read more
ConocoPhillips (COP.N) said its full-year oil and gas production could rise at a single-digit percentage rate from a year ago. But America’s largest independent oil producer raised its shareholder payout target by 50% this week after beating Wall Street earnings estimates on soaring energy prices. Read more
U.S. shale producers Chesapeake Energy Corp (CHK.O), Pioneer Natural Resources Co (PXD.N) and Coterra Energy Inc (CTRA.N), which also reported strong second-quarter earnings this week, boosted returns for shareholders with higher dividends and redemptions. Read more
But with oil prices up around 19% so far this year after climbing 55% in 2021 – and government pressure to produce more – a growing number of energy companies said they planned to increase their spending for a second consecutive year in 2022 after reducing drilling and completions spending in 2019 and 2020.
US financial services firm Cowen & Co said the independent exploration and production (E&P) companies it tracks expect to increase spending by around 35% in 2022 compared to 2021 after increasing spending around 4% in 2021 compared to 2020.
This follows a drop in capital spending of around 48% in 2020 and 12% in 2019.
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Reporting by Scott DiSavino Editing by Marguerita Choy
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