Oil Rigs in U.S. Extend Record as Shale Drilling ClimbsLynn Doan and Richard Stubbe
Rigs drilling for oil in the U.S. rose to a record as energy producers use new technologies to reach deposits of oil buried in shale formations from North Dakota to Texas.
Oil rigs gained for a fifth straight week, climbing by 18 to 1,461, the most since Baker Hughes separated the oil and gas rig counts in 1987, data posted on Baker Hughes Inc.’s website today show. Rigs targeting crude in the Permian Basin, straddling Texas and New Mexico, jumped by seven. Texas’s Eagle Ford shale play added six. North Dakota’s Williston Basin increased by seven to 184, the most since January.
A combination of hydraulic fracturing and horizontal drilling have unlocked shale deposits of oil across the middle of the U.S., boosting domestic crude output last year by the most since 1940 and cutting the nation’s reliance on foreign imports. Production will rise 900,000 more barrels a day this year as drilling efficiency improves in shale plays, according to the U.S. Energy Information Administration.
“Like it has for the last several weeks, the Permian Basin continues to increase drilling, and the Eagle Ford is targeting more wells,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone. “And now the Williston Basin in the Bakken area is finally showing an increase.”
New oil output per rig in North Dakota’s Bakken formation in Williston will rise to a record 492 barrels a day in April, the EIA, the Energy Department’s statistical arm, said in a report March 10. Output per rig in the Permian is expected to climb to 109 barrels a day, a 17-month high.
Exploration in the Permian “has been shifting from shallow, vertical drilling to more complex programs,” Vincent Piazza, a Bloomberg Industries analyst in Skillman, New Jersey, said in a research note March 11. “The new programs target deeper zones and deploy horizontal drilling techniques with unique well completion and stimulation methods.”
Total U.S. oil output rose 105,000 barrels a day, or 1.3 percent, in the week ended March 7 to 8.18 million, EIA data show. Crude stockpiles increased 6.18 million barrels, or 1.7 percent, to 370 million.
West Texas Intermediate crude for April delivery rose 69 cents, or 0.7 percent, to settle at $98.89 a barrel on the New York Mercantile Exchange, up 6.3 percent in the past year.
U.S. gas stockpiles dropped 195 billion cubic feet last week to 1.001 trillion, EIA data show. Supplies were a record 46.2 percent below the five-year average and 48.9 percent below year-earlier levels.
Natural gas for April delivery increased 4.2 cents, or 1 percent, to close at $4.425 per million British thermal units on the Nymex and has risen 16 percent in the past year.
The gas count declined by one to 344, the Houston-based field services company said. Miscellaneous rigs were unchanged at four.