Modest gains in Texas rig count following three months of price stability

Fuel Fix:
The number of rigs actively drilling for oil in the U.S. made its first sizable increase of the year this week now that the price of oil has increased for more than three months, according to weekly data collected by Baker Hughes.

The U.S. oil rig count grew by nine this week, bringing the overall tally up to 325 rigs. Texas’ more resilient Permian Basin led the way with five rigs added to its count, while Alaska brought on three more rigs.

The change shows some signs of life returning to the gloomy oil patch with the U.S. benchmark for oil hovering just below $50 a barrel — a price that could bring small profits for many wells.
The Permian Basin has become the focus of some major players like Chevron which is redirecting investments from offshore plays to the less expensive Permian  which also carries smaller risks of not finding oil.  It is a place where the less leveraged companies can still make money at the current prices.  The highly leveraged companies are still struggling at this price point.

Meanwhile, Exxon is looking at investing up to $10 billion in shale production in Argentina.  This is an investment with some political risk because of the history of political instability in that country.  The current government displaced what appeared to be a government of greed that also appeared to have a high degree of corruption which tends to add costs to any investment.  So far the new government appears to be more honest.


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