April 27, 2018 / 5:32 PM / a year ago

UPDATE 1-U.S. oil rig count rises five this week, 28 this month -Baker Hughes

 (Adds rigs in Bakken)
    April 27 (Reuters) - The U.S. oil drilling rig count rose
for the fourth week in a row and ended the month sharply higher
as producers plan to boost output as they reap profits from
crude trading near three-year highs.
    Drillers added five oil rigs in the week to April 27,
bringing the total count to 825, the highest level since March
2015, General Electric Co's        Baker Hughes energy services
firm said in its closely followed report on Friday.
    For the month, drillers added 28 oil rigs in April after
cutting two rigs in March. So far this year, the rig count has
risen by 78.
    The U.S. rig count, an early indicator of future output, is
much higher than a year ago when 697 rigs were active. Energy
companies have been steadily increasing spending on drilling and
completions since mid-2016 when crude prices began recovering
from a two-year crash.
    U.S. producers are accelerating shale drilling mostly in the
Permian Basin of west Texas and New Mexico, the largest U.S.
oilfield, and the Bakken in North Dakota, lifting the nation's
output this year to more than 10 million barrels per day (bpd),
a new record.
    Drillers added three oil rigs in the Bakken this week,
boosting the total count in the basin to 56, the most since
December 2015.
    The U.S. government expects oil output in the Bakken to rise
to 1.2 million bpd in May, its highest since 2015.             
    U.S. crude futures        traded near $68 a barrel this
week, close to their highest since November 2014. So far this
year, futures have averaged $64, up sharply from averages of
$50.85 in 2017 and $43.47 in 2016.
    Looking ahead, futures were trading around $67 for the
balance of 2018           and $62 for calendar 2019          .
    In anticipation of higher prices in 2018 versus 2017, U.S.
financial services firm Cowen & Co said 58 of the roughly 65
exploration and production (E&P) companies they track have
already provided guidance indicating an 11 percent increase this
year in planned capital spending.
    Cowen said those 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 slightly increased
their forecast for the average total oil and natural gas rig
count to 1,015 in 2018 and 1,130 in 2019. That compares with
last week's forecast of 1,014 in 2018 and 1,129 in 2019.
    So far this year, the total number of oil and gas rigs
active in the United States has averaged 977, up sharply from 
an average of 876 rigs in 2017 and 509 in 2016, and a shade
below 978 in 2015. Most rigs produce both oil and gas.
    ConocoPhillips         said on Thursday its U.S. shale
operations, which made money in the first quarter after losing
cash for more than a year, were now profitable at oil prices
       under $45 per barrel, more than $20 below current
    The world's largest independent oil and gas exploration and
production company kept its 2018 capital budget at $5.5 billion,
but raised its production outlook slightly.
    U.S. oil and gas producer Hess Corp         this week said
that net production fell in the first quarter. While production
had been expected to be lower in the U.S. Gulf of Mexico due to
a shutdown of the Enchilada platform following a fire, the
company exceeded its forecast as output in North Dakota's Bakken
shale increased 12 percent.             
    Oilfield services provider Halliburton Co         reported a
34 percent jump in first-quarter revenue as North American
companies boosted oil and gas production, but warned of ongoing
tightness in the hydraulic fracturing market.             

 (Reporting by Scott DiSavino
Editing by Marguerita Choy)
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