As U.S. oil rises toward $100 a barrel, producers in some high-cost shale basins are buying properties and adding rigs and frack crews in places that fell silent when prices crashed early in the pandemic two years ago. U.S. drillers get busy in costly shale basins now.
Benchmark U.S. prices last week topped $93 a barrel, up around 65% in the last 52 weeks and the highest since 2014. U.S. producers are cranking up spending at double-digit rates as fuel demand has soared and fears have waned that OPEC will again punish them by flooding the market with crude that is cheaper to produce.
Some executives say current high prices and relatively low service costs make production economics the best in years. Firms are buying U.S. oil, pipeline, and gas processing rivals in a bet that higher prices will more than cover rising costs of labor and equipment.
New activity is stirring in secondary oilfields like Colorado’s DJ Basin, Wyoming’s Powder River, Louisiana’s Haynesville, and North Dakota’s Bakken shale, which last year lost its spot as the second-largest U.S. oil-producing region.
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Source: Reuters
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