Source: The Barrel Blog | November 21,2016 | Starr Spencer, Senior writer, Platts
The way US E&P operators are adding rigs, planning activity ramp-ups, preparing to raise capex and looking forward to renewed production growth in 2017, you’d be tempted to write finis to a harrowing two-year industry downturn.
During third-quarter 2016 earnings calls in the last few weeks, oil operator after operator unveiled what became surprisingly repetitive near-term plans: stirring the production pot by slipping a rig or two into the field during the final months of this year, kicking up the capital budget modestly and then returning to production growth in 2017.
“Third quarter results tell the story of good, old fashioned American ingenuity,” Robert W. Baird analyst Ethan Bellamy told S&P Global Platts. “Costs are down, productivity is up, and capital is flowing into the most productive regions.”
CEOs certainly displayed sunnier dispositions on conference calls than a couple of quarters ago when the specter of what then was a recent period of $30/b oil was fresh in their minds.
But now, with a new year looming, oil executives seemed energized by their victory over a low-priced oil world after two years of squeezing costs and efficiencies from oil fields and developing precise completion designs to extract still more oil and gas per well. So they appeared willing to open the purse strings a bit next year—and if oil prices cooperated, rev up the drilling machine and production spigot in the months to come.
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