Patterson – UTI Expects U.S. Oil, Gas Rigs to Climb Above 700 by 2024-End

U.S. energy firms cut the number of active oil and natural gas rigs, an early indicator of future production, to 631 at the end of last week, its lowest since February 2022, Baker Hughes data showed, on weak gas and crude prices.

However, prices for both commodities have recently ticked up as markets worry about tightness during peak winter demand, buoying optimism that companies could put some rigs back to work.

“I am putting a stake in the ground,” Hendricks said. “We are going to be over 700 by the end of ‘24,”, he added, citing stronger crude and gas prices, as well as demand for liquefied natural gas.

The Houston-based firm has signed contract for four drilling rigs starting in the fourth quarter of this year, and is in talks to sign another four that would start between the fourth quarter of 2023 and the first quarter of 2024, Hendricks said.

The company was also in discussions to contract out its rigs in various months and quarters in 2024, Hendricks added.

Well completion activity should also improve at the end of the fourth quarter, despite seasonality as commodity prices are high. Typically, completions activity tail off at the end of the year due to cold weather and the holiday season. (Reporting by Arathy Somasekhar in Houston; Editing by Mark Porter)