March 4, 2016 / 6:08 PM / 2 years ago

U.S. oil drillers cut rigs for 11th week in a row -Baker Hughes

March 4 (Reuters) - U.S. energy firms this week cut oil rigs
for an 11th week in a row to the lowest level since December
2009, data showed on Friday, as Exxon Mobil Corp and
other producers slashed their drilling rig count to focus on
uncompleted wells amid low oil prices.
    Drillers removed eight oil rigs in the week ended March 4,
bringing the total rig count down to 392, oil services company
Baker Hughes Inc said in its closely followed report.
    That compares with 922 oil rigs operating in the same week a
year ago. In 2015, drillers cut on average 18 oil rigs per week
for a total of 963 for the year, the biggest annual decline
since at least 1988.
    Before this week, drillers cut on average 17 rigs per week
so far this year.  
    Analysts forecast the rig count will bottom in a few months
before recovering later this year when they expect crude prices
to rise.
    U.S. crude futures rallied 10 percent to almost $36 a
barrel this week, on track for a third week of gains on talks
between major producers to freeze production. 
    Exploration and production firms on average have slashed
their capital budgets by about 49 percent in 2016 compared with
2015 due to the continued collapse in oil prices earlier this
year, according to analysts at Bernstein, a research and
brokerage firm in New York.
    Exxon this week said it cut its rig count in unconventional
plays by 60 percent from its peak.  
    Anadarko Petroleum Corp, a U.S. exploration and
production company, this week said it slashed its U.S. onshore
rig count by 80 percent to just five, down from an average of 25
in 2015, while it focuses on its approximately 230 drilled but
uncompleted wells, known in the industry as DUCs. 
    Bill Barrett Corp, another U.S. E&P company, also
said this week said it curtailed its drilling activity due to
the energy price rout and released its last rig to preserve
    Those and other recently announced rig cuts have led
analysts to reduce their total natural gas and oil rig count
estimates with many now expecting the total rig count to bottom
in a few months before rebounding later this year when prices
are expected to rise.
    After falling as low as $26.05 a barrel last month, its
lowest level since 2003, U.S. crude futures were fetching around
$40 for the balance of 2016 and $44 for calendar 2017
    Analysts at Evercore ISI, an investment banking advisory
firm, said in a note they expect the total onshore rig count to
exit the quarter at about 425 rigs.


 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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