U.S. Energy Rigs Rise by 2 to 1,763, Baker Hughes Says

Rigs targeting oil and natural gas in the U.S. increased by two this week to 1,763, according to Baker Hughes Inc. (BHI)

Oil rigs rose by four to 1,391, data posted on the company’s website show. The gas count declined by two to 367, the Houston-based field services company said. Miscellaneous rigs were unchanged at five.

Oil production in the U.S. has shot up to the highest level in two decades as energy producers use hydraulic fracturing and horizontal drilling to tap into long-unreachable shale deposits. Companies are also leveraging more efficient drilling techniques to cut the time it takes to bore wells and boost yield.

“Over the last five-plus years, there’s been an enormous amount of exploration and proof work going on, if you like, on how do we drill and complete wells to just identify that there are actually hydrocarbons there,” Derek Mathieson, Baker Hughes’s vice president of strategy and corporate development, said at a conference Nov. 22. “We’re moving into the first generation of true production maintenance in the whole unconventional hydrocarbon area in the United States.”

U.S. oil output rose to 8.02 million barrels a day last week, the highest level since 1989, the Energy Information Administration, the Energy Department’s statistical arm, said today. Crude stockpiles rose 2.95 million barrels to 391.4 million.

West Texas Intermediate crude for January delivery traded at $91.74 a barrel at 1:07 p.m. on the New York Mercantile Exchange, up 5.2 percent in the past year.

Natural Gas

U.S. gas stockpiles declined 13 billion cubic feet last week to 3.776 trillion, the EIA said today. Supplies were 0.5 percent above the five-year average.

Natural gas for January delivery traded at $3.904 per million British thermal units on the Nymex, up 3.6 percent from a year ago.

Producers are increasingly focusing their spending on capital efficiency and “actually making money from production,” Mathieson said. Investments are “moving more into really making this a sustainable business outside of just finding stuff,” he said at the Bank of America Merrill Lynch Global Energy Conference in Miami.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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