News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

U.S. oil producers ramp up fracking in sign of stronger output gains

01/12/2022 | 06:29am EDT
FILE PHOTO: A rig hand works on an electric drilling rig for oil producer Civitas Resources, at the Denver suburbs, in Broomfield

(Reuters) - As oil prices have surged past $80 a barrel, U.S oil and gas producers are paving the way for faster production by expanding new well completions in the Permian Basin of west Texas and New Mexico, the country's top shale oil field, according to research data.

The number of pressure pumping units at work in the Permian rose 5% in December, over the previous month, analysts at Tudor, Pickering, Holt and Co said. Pressure pumping is one of the last steps required to complete a well.

The Permian will account for vast majority of this year's projected boost in U.S. output of up to 900,000 barrels per day. Output fell last year to about 11.18 million bpd on storm-related cutbacks and as demand collapsed during the pandemic, according to government data.

Rising shale flows come as the Organization of the Petroleum Exporting Countries and allies have struggled in recent months to meet targets for higher production. Unrest in Kazakhstan and Libya have raised supply concerns, sending U.S. oil prices to more than $81 per barrel, from $53 a year ago.

Pressure pumping units, also called frac spreads, use water, sand and chemicals to break up shale rock and release trapped oil and gas. Oil companies have slashed a backlog of drilled-but-uncompleted wells and the rise in frac spreads indicates faster activity.

"Contrary to typical seasonal norms, U.S. frac spread count posted healthy month on month improvement during the month of December, driven near entirely by continued strength in the Permian," TPH analyst Taylor Zurcher wrote in a note.

NexTier Oilfield Solutions, the third largest pressure pumper, last week forecast higher than projected fourth quarter sales and earnings, telling investors demand was pushing equipment utilization rates in excess of 90%.

Phones at rival ProPetro Holding Corp last month were "ringing off the hook" from producers, Sankey Research oil analyst Paul Sankey said in a note.

Bank of America analysts this week forecast global spending on drilling and completion will rise 22%, the strongest year-over-year gain since 2006.

(Reporting by Arathy Somasekhar in Bengaluru; Editing by David Gregorio)

By Arathy Somasekhar


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ON SEMICONDUCTOR CORPORATION -1.01% 55.89 Delayed Quote.-17.71%
PROPETRO HOLDING CORP. 4.02% 12.43 Delayed Quote.53.46%
Latest news "Economy & Forex"
05:54pUtilities Up on Deal Activity -- Utilities Roundup
DJ
05:52pCommunications Services Up on Growth Bias -- Communications Services Roundup
DJ
05:51pStarbucks to exit Russia after nearly 15 years
RE
05:49pTech Up, Recouping Losses on Deal Activity -- Tech Roundup
DJ
05:47pEmbattled U.S. Rep. Cawthorn faces House ethics probe after election defeat
RE
05:44pFinancials Up after JPMorgan's View of Consumer -- Financials Roundup
DJ
05:44pAustralian Consumer Confidence Rises Helped By Falling Jobless Rate
DJ
05:43pSpirit Airlines says shareholders unlikely to vote against Frontier deal
RE
05:39pConsumer Cos Up as Inflation Concerns Subside -- Consumer Roundup
DJ
05:38pThe WSJ Dollar Index Falls 0.74% to 94.73 -- Data Talk
DJ
Latest news "Economy & Forex"