U.S. energy firms this week added oil and natural gas rigs for the 11th time in 12 weeks as producers return to the wellpad even as most are cutting spending this year and next.
The oil and gas rig count, an early indicator of future output, rose three to 323 in the week to Dec. 4, energy services firm Baker Hughes Co said in its closely followed report on Friday.
That was 476 rigs, or 60%, below this time last year.
The number of operating rigs has surged since August, when it hit a record low of 244, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose five to 246 this week, their highest since May, while gas rigs fell to two to 75, according to Baker Hughes data.
Even though U.S. oil futures were down about 25% since the start of the year at around $46 a barrel, it was still up about 144% over the past eight months on hopes global economies and energy demand will return when governments lift coronavirus lockdowns.
Exxon Mobil Corp said this week it would write down the value of gas properties by $17 billion to $20 billion, its biggest ever impairment, and slash project spending next year to its lowest level in 15 years.
Most energy firms have said they plan to cut spending in 2020 and 2021 as they continue to focus on improving their earnings rather than just boosting their output.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P) companies it tracks plan to slash spending by about 48% in 2020 versus 2019. That follows a capex reduction of roughly 12% in 2019 and an increase of around 23% in 2018.
Cowen also said that some E&Ps issued early estimates for 2021 that so far point to an 6% drop in spending next year versus 2020.
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