Crude prices surged in April after OPEC+ announced it was slashing output by 1.16 MMbopd as a precautionary measure targeted at stabilizing oil markets. The voluntary reduction is expected to run until the end of 2023. WTI gained 8.4%, to average $79.45/bbl in April, while Brent traded at $84.64/bbl, up 8% compared to March. The catastrophic decline in U.S. natural gas prices continued, with the commodity at Henry Hub down $6.65/MMBtu since August 2022 ($8.81/MMBtu), to average just $2.16/MMBtu in April, a decline of 75%.
U.S. rig count. The increase in crude prices had little effect on U.S. drilling, as the rig count remained unchanged at 752 in April. The overall Texas count was up seven rigs to 377, with RRC District 2 gaining five rigs up to 31, while the Permian’s District 8 gained four drilling units to average 204 in April. Oklahoma was on the minus side of the equation, dropping five rigs, down to 56. Operators in District 1 also pulled back, reducing activity in the Eagle Ford play by five rigs, down to 28.
Drilled but uncompleted. Plummeting natural gas prices in the U.S. continue to add to the DUC count at an alarming rate. In April 2023, there were 4,863 DUCs in the U.S., 640 more than the 4,223 tallied in April 2022. Large y-o-y gains were reported in the Niobrara region up to 709 (+129%), Haynesville at 737 (+81%), Appalachia at 703 (+50%) and the Bakken at 565 (+35%). These four regions account for 44% of the total U.S. DUC count. The Permian and Eagle Ford experienced y-o-y declines of -27% and -22% DUCs, respectively.
International rig count. In March, rigs working outside the U.S. averaged 1,126, 37 less than the 1,163 running in February. The decrease was attributed mainly to a 52-rig loss in Canada, in addition to a 34-rig decline in the Middle East, down to 293.
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