UPDATE 2-Permian basin sees first rig increase since oil rout -Baker Hughes

Fri May 8, 2015 2:57pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Recasts to add Permian rig additions in paragraphs 1, 2 and 3)

May 8 (Reuters) - After weeks of idling rigs on slumping crude prices, U.S. oil drillers added rigs to the Permian Basin for the first time this year, industry data showed on Friday.

Energy companies increased by one each the number of oil rigs in the Permian basin of West Texas and eastern New Mexico - the biggest and fastest growing U.S. shale oil field - and in the Barnett in Texas.

That was the first increase in the Permian since December and the first in the Barnett since March, oil services company Baker Hughes Inc said on Friday.

Overall, the number of active oil rigs declined for the 22nd week in a row, but the rate of that decline has slowed in recent weeks, suggesting the collapse in drilling may be coming to an end as prices recover after falling 60 percent from June to March.

The number of rigs drilling for oil fell by 11 this week to 668 - the smallest drop since early April - after declining 24 and 31 in the prior two weeks, Baker Hughes said.

With the oil rig decline this week, the number of active rigs has fallen to the fewest since September 2010, according to Baker Hughes data going back to 1987.

Since the number of oil rigs peaked at 1,609 in October, producers have reacted quickly to the steep drop in prices since the summer by cutting spending, eliminating jobs and idling more than half of the country's rigs.

The U.S. oil rig count is nearing a pivotal level experts say is helping to bolster prices and trim production, and will eventually coax oil companies back to the well pad in coming months.   Continued...