U.S. Energy Companies Reduce Drilling Rigs: Impact on Production and Future Forecast

2024-01-12 18:02:23

U.S. energy companies this week reduced the number of oil and natural gas drilling rigs for the second week in a row, energy services company Baker Hughes said in its closely watched report on Friday.

The number of oil and gas installations, an early indicator of future production, fell by two units to 619 in the week ended January 12, the lowest level since November.

Baker Hughes said U.S. oil rigs fell by two to 499 this week, while gas rigs fell by one to 117.

The number of drilling rigs in the United States

fell by around 20% in 2023

following rising 33% in 2022 and 67% in 2021, mainly due to falling oil and gas prices, rising drilling costs and as companies cut spending to pay more their shareholders.

U.S. oil futures are up 1% so far in 2024, following falling 11% in 2023. U.S. gas futures, meanwhile, are up 32% so far in 2024. present in 2024 following falling by 44% in 2023.

Fourteen of the independent exploration and production (E&P) companies tracked by US financial services company TD Cowen said they plan to reduce spending by around 4% in 2024 compared to 2023.

In 2023, 25 of the exploration and production companies tracked by TD Cowen said they planned to increase spending by regarding 20% from the previous year, following increasing spending by regarding 40%. in 2022 and 4% in 2021.

Despite falling prices, spending, and rig counts, U.S. oil and gas production is still on track to hit record levels in 2024 and 2025 thanks to efficiency gains and completion by companies carrying out work on wells already drilled.

The total number of wells drilled but not completed (DUC) fell to a record low of 4,415 in November, according to federal energy data dating back to December 2013. (Reporting by Scott DiSavino, Editing by Marguerita Choy)

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