Houston-based EOG Resources Inc. began shutting in some oil production in March, with plans to curtail output through at least June as it waits out the downturn in demand and pricing caused in part by Covid-19.
Eagle Ford Shale
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The bleeding continued in the U.S. onshore during the week ended Friday (May 8), with yet another steep decline in oil activity dropping the overall U.S. rig count 34 units to 374, according to the latest figures from Baker Hughes Co. (BKR).
Aggressive retrenchment in the U.S. oil patch remained the dominant theme in the latest rig numbers, with the United States dropping 57 rigs to fall to 408 during the week ended Friday (May 1), according to data from Baker Hughes Co. (BKR).
Having already announced gross voluntary oil production cuts of 225,000 b/d for May because of weak prices, ConocoPhillips has now updated that amount to 265,000 b/d, management said Thursday.
Valero Energy Corp., which manufactures and markets transportation fuels, began to see improvements in fuel demand in the second half of April, a gradual recovery that is expected to improve as the economy comes back to life following severe Covid-19 restrictions.
A ruling to require Texas producers to shut-in 20% of their oil output beginning June 1 was tabled until early next month as regulators ponder how to assist the state’s ailing energy industry.
Regulators who oversee the Texas energy industry may decide within days whether to require oil output be reduced or instead allow the free markets to continue to dictate, as the coronavirus and low prices decimate the marketplace.
The dramatic decline in U.S. onshore activity showed no signs of letting up during the week ended Friday (April 17) as the domestic rig count plummeted another 73 rigs to fall to 529, according to the latest figures from Baker Hughes Co. (BKR).
Having already plunged by 62% year/year (y/y) in the first three months of 2020, permitting for Lower 48 oil and natural gas drilling is expected to drop further in April, according to a team of Evercore ISI analysts led by James West.
Houston’s ConocoPhillips said Thursday it is taking on the epic decline in energy demand from the coronavirus by shutting in 200,000 boe/d combined in the Lower 48 and Canada, around 25% of output, and taking a knife to carve out more capital spending.