Friday it was reported that U.S. Drillers added more rigs for the seventh straight week. For the past several months the commodity price of natural gas has been on a rollercoaster depending on the day and weather outlook however hoovering around $2.75 for a while now (spot price today @ 2.81).
North American exploration and production companies will spend one-quarter more this year, leading global spending growth among oil and gas companies. The biggest swing comes in North America, fueled by U.S. shale drillers, where spending had dipped by 38 percent in 2016, according to Barclays. Larger companies could boost spending by as much as 58 percent this year.
With the newly approved pipelines in the Appalachian Region, decrease in DUCs and Shell cracker plant progression plus an anticipated one or two more crackers in the northeast, drilling almost has to start in the next six to 12 months. Some pipeline companies have expressed a concern that with the long-term downturn (or as would say a complete halt of drilling) ‘will there be enough gas to move when these pipeline are complete?’. And if that’s not enough to be optimistic of the anticipated increased drilling these companies are committed to increased drilling by earmarking money into specific plays;
- Range Resources- $1.15 billion increased budget for 2017 with 2/3 allocated to Marcellus Shale and 1/3 to N. Louisiana. An estimated 80% of the Marcellus budget is directed to drilling.
- Rice – $1.04 billion on drilling completions for Marcellus and Utica plays with and an additional $225 million for land acquisition. Rice’s Marcellus’ wells costs $7.4 million vs. Utica at $13 million.
- EOG – Is projected to spend $3.7 billion to $4.1 billion for 2017.
- ExxonMobile – 2017 plan is to spend $22 million on CAPEX, 15.8% increase; $775 million for 2017 capital spending vs $400 million in 2016
- Cabot – Looking to spend between $575 million to $650 million; 2/3 earmarked for Marcellus with remaining 1/3 in Eagle Ford
- Eclipse – Budgets spending $300 million on capital projects in 2017, up sharply from the $176.9 million spent in 2016
And this is just a few of the companies that we know have disclosed their 2017 budgets with the prospective allocation where the funds are committed. Even though budgets have greatly increase for 2017 companies are concerned that operating costs and the uncertainly of the commodity price could still bring drilling about at a slow pace. Stay tuned and stay connected for updates with ShaleDirectories.com.