U.S. energy firms this week added oil and natural gas rigs for a second week in a row for the first time since mid September, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, rose two to 624 in the week to Oct. 20.
Despite this week’s rig increase, Baker Hughes said the total count was still down 147, or 19%, below this time last year.
U.S. oil rigs rose by one to 502 this week, while gas rigs also gained one to 118.
In the Haynesville shale in Arkansas, Louisiana and Texas, gas drillers this week added three rigs, boosting the total to 40. That was the first increase in the Haynesville since early July and the biggest increase since December 2022. A year ago, there were 70 rigs operating in the Haynesville.
U.S. oil futures were up about 12% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 35% so far this year after rising about 20% last year.
Despite higher prices for oil, many firms remained more focused on returning money to investors and paying down debt rather than boosting oil and gas production.
U.S. oil output from top shale-producing regions is on track to decline for a third month in a row in November to its lowest since May, according to the U.S. Energy Information Administration’s (EIA) monthly Drilling Productivity Report.
That oil output decline comes even though energy companies were expected to boost spending for a third year in a row in 2023 – though mush of that extra spending will cover rising inflation-related costs for labor and equipment.
The independent exploration and production companies tracked by U.S. financial services firm TD Cowen were on track to boost spending by about 18% in 2023 versus 2022 after increasing spending about 40% in 2022 and 4% in 2021. That 2023 spending increase, however, is down from an earlier expected rise of 19%.
(Reporting by Scott DiSavino Editing by Marguerita Choy)