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7th week of Oil and Gas Rigs’ Growth
05/13/2022
In the midst of the high prices and the U.S. government’s pushing, in the last week, the number of oil rigs increased by 5 and in total makes 557, its highest since April 2020, according to Baker Hughes Co BKR.N. Concerning the gas rigs, they gained 2 to 146, their highest since September 2019.
However, most shale producers preferred shareholder returns over new spending on production.
Due to the Russian invasion of Ukraine on 24th, February, the U.S. government has insisted that drillers produce more oil and gas in order to reduce local prices and support other countries to avoid Russian energy dependence.
Being an early indicator of future output, the rig count climbed for a record 21 months in a row through April. Nevertheless, weekly increases have mostly been in single digits and oil production is still far below pre-pandemic record levels.
Moreover, crude production was aimed to rise from 11.2 million barrels per day (bpd) in 2021 to 12.0 million bpd in 2022 and 13.0 million bpd in 2023, according to federal energy data.
Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag.
Rextag's Pad Activity monitor (#PAM) assists to learn about potential increases or decreases in oil and gas production months ahead of others and how potential volumes could impact storage and transportation across the Permian Basin. With the help of satellite imagery and artificial intelligence, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days.
The incredible first-quarter profits were reported by top U.S. shale producers that week. As oil prices churned at the highest levels in years, lots of money was poured into higher dividends and share buybacks.
A large number of energy companies are going to increase capital spending for a second year in a row in 2022 as the oil prices are up about 47% so far this year to about $110 a barrel, after soaring 55% in 2021.
The independent exploration and production (#E&P) companies intend to raise expenditures by about 29% in 2022 compared with 2021 after increasing spending by about 4% in 2021 regarding 2020, as U.S. financial services firm Cowen & Co. declared.
As a result, there is a drop in capital expenditures of roughly 48% in 2020 and 12% in 2019.
The overall amount of rigs in the U.S. would grow to an average of 684 in 2022 and 783 in 2023, due to U.S. investment bank Piper Sandler forecast. As Baker Hughes claimed that compares with an average of 478 in 2021.
If you are interested in learning more about PAD Activity Monitor, please, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
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Persistent Production Uptick in the Permian Basin
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No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.
EIA: Permian Basin Oil and Gas Output is Thought to Beat Record in June
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The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.
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ONEOK Inc. and Magellan Midstream Partners LP have announced a merger agreement that will result in the formation of a formidable midstream company headquartered in Tulsa, Oklahoma. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/151Blog_Percussion acquisition map in the Eagle Ford $1.1 Billion Delaware Asset.png)
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million. In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/150Blog_Permian Resources Secures a Major Deal in the Thriving Delaware Basin.png)
Permian Resources bolsters dominance in the Delaware Basin with strategic land acquisitions, expanding its portfolio by over 5,000 net leasehold acres and 3,000 royalty acres. In a stunning display of growth and strategic maneuvering, Permian Resources Corp., based in Midland, Texas, has made waves in the first quarter by securing a series of deals worth over $200 million in the highly sought-after Delaware Basin. This move solidifies their position as a player in the region.