April 13, 2018 / 5:41 PM / 7 months ago

UPDATE 1-U.S. drillers add oil rigs for second consecutive week -Baker Hughes

 (Adds Permian rigs)
    April 13 (Reuters) - U.S. energy companies added oil rigs
for a second week in a row, following through on plans to spend
more on drilling this year with crude prices at three-year
highs, energy services firm Baker Hughes said on Friday.
    Drillers added seven oil rigs in the week to April 13,
bringing the total to 815, the highest since March 2015, the
General Electric Co        unit said in its closely followed
report. RIG-OL-USA-BHI
    More than half the total oil rigs are in the Permian basin
in west Texas and eastern New Mexico. Active units there
increased by one this week to 445, the most since January 
2015.
    The U.S. government expects oil output in the Permian to
rise to a record high near 3.2 million barrels per day in April,
about 30 percent of total U.S. oil production.             
    The U.S. rig count, an early indicator of future output, is
much higher than a year ago when 683 rigs were active. Energy
companies have steadily hiked spending since mid-2016 as crude
prices have recovered from a two-year slump.
    U.S. crude futures        traded around $67 a barrel this
week, their highest since December 2014. Looking ahead, crude
futures were trading around $66 for the balance of 2018
          and $61 for calendar 2019          .
    In anticipation of higher prices, U.S. financial services
firm Cowen & Co said 58 of the roughly 65 exploration and
production (E&P) companies it tracks have already indicated an
11 percent increase this year in planned capital spending.
    Cowen said E&Ps that have reported capital plans for 2018
expected to spend a total of $80.5 billion in 2018, up from an
estimated $72.4 billion in 2017.
    Analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, this week forecast the total oil
and natural gas rig count would average 1,013 in 2018 and 1,129
in 2019, the same as last week.
    So far this year, the total number of oil and natural gas
rigs active in the United States has averaged 972, up sharply
from an average of 876 rigs in 2017 and 509 in 2016, and not far
from the total of 978 in 2015. Most rigs produce both oil and
gas.
    The U.S. Energy Information Administration (EIA) this month
projected average annual U.S. production will rise to a record
high 10.7 million barrels per day (bpd) in 2018 and 11.4 million
bpd in 2019 from 9.3 million bpd in 2017.        
    The current all-time U.S. annual output peak was in 1970 at
9.6 million bpd, according to federal energy data.

    
 (Reporting by Scott DiSavino
Editing by Susan Thomas and David Gregorio)
  
 
 
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