(Reuters) – U.S. energy firms this week cut the number of oil and rigs operating for an eighth week in a row for the first time since July 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by 5 to 682 in the week to June 23, the lowest since April 2022.
Baker Hughes said that puts the total rig count down 71 rigs, or 9%, over this time last year.
U.S. oil rigs fell 6 to 546 this week, their lowest since April 2022, while gas rigs held steady at 130.
The rig count fell by one to 50 in the Haynesville shale in Arkansas, Louisiana and Texas, the lowest since January 2022, and by one to 35 in Williston in North Dakota and Montana, the lowest since April 2022, according to Baker Hughes.
Data provider Enverus, which publishes its own rig count data, said drillers cut eight rigs in the week to June 21, reducing the overall count to 741. That put the total count down about 24 rigs in the last month and down 12% year-over-year.
U.S. oil futures were down about 14% so far this year after gaining about 7% in 2022. U.S. gas futures, meanwhile, have plunged about 41% so far this year after rising about 20% last year.
The massive drop in gas prices has already caused some exploration and production companies, including Chesapeake Energy Corp (NYSE:), Southwestern Energy (NYSE:) Co and Comstock Resources (NYSE:) Inc, to announce plans to reduce production by cutting some rigs – especially in the Haynesville shale in Arkansas, Louisiana and Texas.
Despite some plans to lower rig counts, the independent exploration and production companies tracked by U.S. financial services firm TD Cowen were on track to boost spending by about 19% in 2023 versus 2022 after increasing spending about 40% in 2022 and 4% in 2021.
That increased spending will help keep production on track to rise from 11.9 million barrels per day (bpd) in 2022 to 12.6 million bpd in 2023 and 12.8 million bpd in 2024, according to projections from the U.S. Energy Information Administration (EIA) in June. That compares with a record 12.3 million bpd in 2019.
U.S. gas production, meanwhile, was on track to rise from a record 98.13 billion cubic feet per day (bcfd) in 2022 to 102.74 bcfd in 2023 and 103.04 bcfd in 2024, according to EIA’s projection.
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