Despite a decline in the number of drilling rigs, US crude oil production reached a record high in August 2023, driven by productivity gains and more efficient operations. Exploration and production companies are drilling longer lateral wells and focusing on promising areas to maximize output. Texas, the top oil-producing state, achieved a record-high production of 5.7 million barrels per day. The US shale industry is prioritizing capital and operational efficiency to demonstrate measured growth and higher returns to investors. Despite a decrease in rig count, shale firms are producing more oil and gas, exceeding earlier projections. The Energy Information Administration expects US crude oil production to continue growing, with increased rig activity anticipated in 2024.
The number of active drilling rigs in the United States has dropped to a 19-month low, with a total rig count of 630, according to data from Baker Hughes. This marks a loss of 149 active drilling rigs so far this year and a decrease of 445 rigs compared to the beginning of 2019. The number of oil rigs fell by 8 to 507, while gas rigs fell by 3 to 118. However, crude oil production levels remain high at 12.9 million bpd, up 800,000 bpd from a year ago.
The US oil and natural gas rig count fell to its lowest in nearly a year, with gas rigs slumping by the most in a week since February 2016, according to Baker Hughes. The drop in gas prices has already caused some exploration and production companies to announce plans to reduce production by cutting some gas rigs. Despite some plans to lower rig counts, US crude production was still on track to rise to a new record high of 12.5 million bpd in 2023 and 12.7 million bpd in 2024, according to projections from the US Energy Information Administration.
