Rig Count Rise Continues To Lead US Crude Production To 20-Month Highs

Tyler Durden's picture

With WTI prices back below $50, it appears stocks and NOPEC production are trumping any OPEC hype/hope and today's Baker Hughes' rig count merely adds to those concerns. For the 13th week in a row, the number of US oil rigs rose (up 5 to 688, the highest since April 2015).

  • *U.S. GAS RIG COUNT UP 5 TO 167 , BAKER HUGHES SAYS :BHI US
  • *U.S. OIL RIG COUNT UP 5 TO 688 , BAKER HUGHES SAYS :BHI US

Though the rig count iuncreased, it is the smallest rise in 3 months...

 

US Crude production reaches its highest since August 2015 as it tracks the lagged rig count higher...

At this pace, US crude production will be at record highs (above 9.6mm b/d) by August. And while the U.S. shale sector continues to be the hottest spot in natural resources investment, OilPrice.com's Dave Forest notes that news this week suggests America’s oil and gas industry may have a new rival — as shale in a completely different part of the world gets ready to go commercial.

In Argentina.

The governor of Argentina’s Neuquen province Omar Gutierrez said in a statement Monday that shale production is about to begin in earnest in his territory. With ExxonMobil reportedly about to push the button on a major project in the Vaca Muerta shale here over the coming weeks.

Governor Gutierrez noted that he was in Houston last week meeting with Exxon management. Who reportedly told him the company will enter the “production phase” on the company’s Vaca Muerta projects this May.

Gutierrez didn’t give additional detail on the specific projects that will be put into full-scale production. And Exxon itself hasn’t made any announcements — but the move to commercial production would make sense, given that the firm launched a pilot project for shale production in the Vaca Muerta last year.

If the major is indeed going ahead, it would be one of the biggest developments we’ve seen for international shale. With Governor Gutierrez saying that Exxon’s investment in the Vaca Muerta by the end of 2017 will have already amounted to a full $750 million.

The Governor also said Exxon plans to ramp up production quickly here — noting that the major aims to hit 5 million cubic meters (176.5 million cubic feet) per day over the next two to three years.

That kind of production growth would clearly point to Argentina as the “next big thing” in shale. And would show that local gas pricing — where producers are currently being offered $7.50/MMBtu — is working in supporting development.

Watch for confirmation from Exxon on plans for the Vaca Muerta. And for increasing activity in the play, with a tender for 56 new oil and gas blocks here currently in market by Argentina officials.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Government needs you to pay taxes's picture

Anything that makes the Izzlamists irrelevant is GRRRRREAT for America.

IntercoursetheEU's picture

Anything to keep up those line of credit payments. Fracking is a scam.

NurseRatched's picture

The rig count numbers are especially important because in the US, oil and gas production per rig has increased four-fold in the last decade. The oil patch productivity gains are real, impressive and largely unreported. If solar panels or battery technology (or any other Silicon Valley darling technology) had increased at the same rate, we would never stop hearing about it.

truthalwayswinsout's picture

The reason this is taking off is because Fracking 2 is cheaper and faster to do. This means the break even point is probably around $26-$30. With Fracking 3 it will be below $15. That will be the end of the Dune Koons and Sand Niggers.

innertrader's picture

Hey, we've been letting Foreign interest buy our mineral rights since the early 80's.  Who knows how much of "our" production, is owned by foreigners!

I THINK IT'S ABOUT TIME WE NATIONALIZE FOREIGN INTEREST IN USA PRODUCTION AND MINERAL RIGHTS!!!!!!  HEY, JUST FOLLOWING WHAT THEY DID!!!

 

TRIUMPH with TRUMP!!!

gdpetti's picture

and no need to be concerned about the people living in the area being polluted, it's not like they need clean water, and heck, the drilling company will be long gone from Dodge before any sort of retributions are put in place.

In the meantime, drill baby drill... crash the market... crash it... pull that rug out.

Is-Be's picture

I see that the oil concentration is 1 to 5%.What I would like to know is the energy return on energy investment, 

How much energy does it take to produce a gallon of petroleum from this bitumen?

https://en.m.wikipedia.org/wiki/Vaca_Muerta

francis scott falseflag's picture

Well, here's another misleading, feel-good article about shale gas and oil.  It starts out talkng 

about the weakening price of WTI and gas and oil rig counts. (both were up 5)  And shows

the WTI price lagging that of the rig count.  But how US oil rig count lags US crude oil

production.  We're producing more oil without a corresponding increase in the number of rigs.  

That has to be good news.

 

Let's see if there's anything else good in this apples and oranges article.  

Before we get to the bait and switch.

Why, yes there is.  Argentina has shale formations and is about to go into full scale production

under the auspices of ExxonMobil, "who by the end of 2017 will have invested

$750 mln in the project."  

"ready to begin production in earnest."

"production to begin in May."

"full scale production... commercial production makes sense" 

"it would be one of the biggest developments we’ve seen for international shale."

 

But Oh Oh. the last 3 paragraphs of the two part article.

The rig counts and the crude oil production in the first part  The second about the

beginning of Argentine Shale production.  Which ends:

 "...Exxon plans to ramp up production quickly here — noting

that the major aims to hit 5 million cubic meters (176.5 million cubic feet)

per day over the next two to three years."

CUBIC METERS THAT'S GAS NOT OIL.

   "...production growth would clearly point to Argentina as the “next big thing”

in shale. And would show that local gas pricing — where producers are

currently being offered $7.50/MMBtu — is working in supporting development."


"Watch for confirmation from Exxon on plans for the Vaca Muerta. And for increasing activity in the play, with a tender for 56 new oil and gas blocks here currently in market by Argentina officials.

So that's it. The first part of the story is about US crude and shale production, the rig

count, and the falling price of WTI.  And the the second part is how Argentine should 

be hitting the market before the end of this decade. 

WITH GAS, ExxonMobil and Argentina are all about sale gas and not shale oil.

Every three-legged dog can find and produce shale gas. It's finding the rare and finite

numbers of shale oil 'reservoirs', which is the winning shale oil play.  Reservoirs that

took eons to fill up and were not made in a year or two.

 

Yes, another feel good story about how producing shale gas should make the US the

largest crude oil producer in the world and take the cognoscenti's mind off the fact

that there is EVERY INDICATION that the Ghawar Field in Saudi Arabia is finally losing production.