US drillers cut oil and gas rigs for first time in three weeks - Baker Hughes (updated)

Vital Energy

22/09/2023 18:53

(Adds year-over-year rig changes, Permian and Haynesville rig
counts in paragraphs 3, 5, 6)
    By Scott DiSavino
       Sept 22 - U.S. energy firms this week cut the number of
oil and natural gas rigs operating for first time in three
weeks, energy services firm Baker Hughes  BKR.O  said in its
closely followed report on Friday.
    The oil and gas rig count, an early indicator of future
output, fell by 11 to 630 in the week to Sept. 22, the lowest
since February 2022.  RIG-USA-BHI   RIG-OL-USA-BHI 
 RIG-GS-USA-BHI 
    Baker Hughes said that puts the total rig count down 134
rigs, or 18%, below this time last year.
        U.S. oil rigs fell by eight to 507 this week, their
lowest since February 2022, while gas rigs dropped by three to
118.
    In the Permian in West Texas and eastern New Mexico, the
nation's biggest shale oil basin, drillers cut five rigs,
bringing the total oil and gas count down to 317, the lowest
since March 2022, according to Baker Hughes.
        In the Haynesville shale in Arkansas, Louisiana and
Texas, drillers cut the number of gas rigs operating by two to
39, the lowest since November 2020.
  
        U.S. oil futures  CLc1  were up about 12% so far this
year after gaining about 7% in 2022. U.S. gas futures  NGc1 ,
meanwhile, have plunged about 41% so far this year after rising
about 20% last year.
    Even though energy companies were on track to boost spending
for a third year in a row in 2023 - mostly to cover rising
inflation-related costs for labor and equipment - many firms
were still more focused on returning money to investors and
paying down debt rather than boosting oil and gas production.
    The independent exploration and production companies tracked
by U.S. financial services firm TD Cowen planned to raise 
spending by about 19% in 2023 after boosting it by about 40% in
2022 and a modest 4% increase in 2021.
    Higher prices for oil put U.S. crude production on track to
rise from 11.9 million barrels per day (bpd) in 2022 to 12.8
million bpd in 2023 and 13.2 million bpd in 2024, according to
Energy Information Administration (EIA) projections. That
compares with a record 12.3 million bpd in 2019.
    Oil output from top shale-producing regions, however, is set
to fall for a third consecutive month in October to its lowest
level since May, according to the EIA.
    Despite lower prices for gas, U.S. gas production was on
track to rise from a record 98.1 billion cubic feet per day
(bcfd) in 2022 to 102.7 bcfd in 2023 and 104.9 bcfd in 2024,
according to EIA's projections in September.
    That increase in gas output despite lower gas prices is due
mostly to increased interest in oil drilling in shale basins
that also produce lots of associated gas like the Permian.

 (Reporting by Scott DiSavino
Editing by Marguerita Choy)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))
 
((For Refinitiv, formerly called Thomson Reuters Analytics, see: cpurl://apps.cp./cms/?pageid=usa-gas
    For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
    U.S. natural gas inventories: http://tmsnrt.rs/2ewaRk2
    For a list of all Baker Hughes rig counts around the world, see:  RIG-NOM-BHI 
    For U.S. oil rigs, see:  RIG-OL-USA-BHI 
    For U.S. gas rigs, see:  RIG-GS-USA-BHI ))