Bloomberg News

Energy Rigs in U.S. Advance to 1,757, Baker Hughes Reports

July 03, 2013

Oil and gas rigs in the U.S. advanced by nine to 1,757, the first gain in three weeks, according to Baker Hughes Inc. (BHI:US)

Oil rigs increased by five to 1,395, the Houston-based field services company said on its website. Gas rigs were up two to 355, and miscellaneous rigs rose two to seven.

The total count remained unchanged in the second quarter after five straight declines, potentially foreshadowing a rebound in activity and an increase in field-services demand as producers respond to this year’s rise in both oil and natural gas prices. June was the most active month for U.S. land drilling permits in more than a year, according to a Barclays Plc (BARC) research note.

“With a frustratingly slow expansion of the land rig count to start the year, most investors demonstrated skepticism that demand prospects were improving for service providers throughout most U.S. basins,” James West, an analyst for the Barclays investment-banking unit in New York, said in the note yesterday. “Permitting activity, which typically leads drilling activity by several months, has been strong. We think gains in the rig count will accelerate.”

Natural gas for August delivery rose 0.5 cent to $3.659 per million British thermal units on the New York Mercantile Exchange, up 26 percent from a year ago.

U.S. gas stockpiles gained 72 billion cubic feet in the week ended June 28 to 2.605 trillion, the Energy Information Administration, the Energy Department’s statistical arm, said today. Supplies are 16 percent below year-earlier levels.

Oil Output

U.S. oil output climbed 6,000 barrels a day to 7.27 million last week, EIA data show. Production reached 7.37 million barrels a day in the week ended May 3, the most since 1992. Stockpiles dropped for the first time in four weeks, falling 10.3 million barrels to 383.8 million, the EIA said.

Crude for August delivery rose $1.54, or 1.5 percent, to $101.14 a barrel today on the Nymex, up 15 percent in the past year. Oil rose above $100 a barrel for the first time in nine months as Egypt’s political showdown escalated and supplies declined.

A boom in U.S. gas and oil output, driven largely by hydraulic fracturing and horizontal drilling, helped the nation meet 89 percent of its energy needs in March, the highest monthly rate since April 1986, Energy Information Administration data show.

Exco Resources Inc. (XCO:US), based in Dallas, agreed to buy Chesapeake Energy Corp. (CHK:US) assets in the Eagle Ford and Haynesville shale formations for about $1 billion, the company said in a statement today. Exco is adding the equivalent of 6,100 barrels of oil production a day in the Eagle Ford and 114 million cubic feet of natural gas in the Haynesville, the statement shows.

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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Companies Mentioned

  • BHI
    (Baker Hughes Inc)
    • $69.14 USD
    • 2.83
    • 4.1%
  • XCO
    (EXCO Resources Inc)
    • $6.18 USD
    • 0.09
    • 1.46%
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