U.S. oil and natural gas producers continue to ramp drilling activity as Baker Hughes (BHI) reported Friday that 15 rigs came online over the past week, bringing the Houston oilfield services provider's tally to 824 units.
Baker Hughes' oil rig count climbed 10 to 662, while the natural gas count grew by five to 160 overall.
Meanwhile, the offshore rig count ticked back up this week by four rigs after falling by one in the previous frame. The offshore count, now at 22, is down four rigs year-over-year.
All told, the U.S. count is now up 374 rigs from this time last year when the count stood at 450, Baker Hughes said, with oil rigs up 300, gas rigs up 72 and miscellaneous rigs up two.
And with another week passed in west Texas' prolific Permian Basin comes another increase in drilling activity. The basin saw four rigs come online during the week, the most of any U.S. shale formation. South Texas Haynesville Shale and the Eagle Ford Shale of East Texas each saw a modest one-rig uptick.
The pace of Baker Hughes' rig count has not slowed so far this year. In the first three months of the year, the count has come up by more than 160 units, largely through the addition of oil rigs.
But some industry followers expect that pace will settle some over the course of the year with oil prices stuck in a range lower than many investors are likely hoping to see.
RBC Capital Markets analyst Kurt Hallead says with his firm's commodity team forecasting West Texas Intermediate crude oil prices averaging $56 per barrel in 2017, the U.S. land rig count should rise just 50% year-over-year, while the horizontal rig count should fare slightly better with a 53% increase over 2016.
Hallead said the firm continues to prefer Patterson-UTI (PTEN - Get Report) as a play on the early stage cycle recover in North America. RBC noted, however, that recent industry commentary suggests reactivation costs for both rigs and hydraulic fracturing fleets could weigh on margins over the next couple quarters for PTEN and other oilfield service providers.
Meanwhile, Baker Hughes' reported the Canadian rig count is down 30 rigs this week after hemorrhaging an astounding 91 rigs in the previous frame. Canada's overall count now sits at 155, with oil rigs down by 15 this week to 55, gas rigs down by 14 to 114 and miscellaneous rigs down one.