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U.S. oil and gas improvements spreading out from Texas

Rig activity, which offers a loose metric of exploration and production work, has improved in most western shale states.

By Daniel J. Graeber
Increases in rig deployments aren't just something that happens in Texas anymore, industry data show. File photo by Gary C. Caskey/UPI.
Increases in rig deployments aren't just something that happens in Texas anymore, industry data show. File photo by Gary C. Caskey/UPI. | License Photo

Feb. 7 (UPI) -- Growth in U.S. exploration and production activity is spreading outside the Permian shale to the rest of the country, monthly figures indicate.

Commodity pricing group S&P Global Platts said its January land rig count, emailed to UPI, was up 4 percent from December and 40 percent higher than for January 2017. Rig counts serve as a loose indication of exploration and productivity in a particular region and could offer clues about actual output in the future.

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Platts counted rig activity in six states with lucrative shale oil and gas assets -- Colorado, Louisiana, New Mexico, North Dakota, Oklahoma and Texas. Of those, New Mexico had the largest monthly gain in rig activity, with its 9-rig increase from December representing a 12 percent improvement. Louisiana had the lowest increase at 2 percent, or a gain of 1 rig from December. Year-on-year, New Mexico, which hosts parts of the lucrative Permian shale, saw rig counts more than double, from 40 in January 2017 to 83 last month.

"While a significant amount of month-to-month improvement was due to drilling activity in the Permian -- both in Texas and New Mexico --, we are now starting to see some dispersion in permits that points towards future growth being led from other regions in the months ahead," Trey Cowan, a senior industry analyst for Platts, said in a statement.

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The January rig count follows the release of an annual report from the U.S. Energy Information Administration, which found total U.S. crude oil production could soon peak at around 11.5 million barrels per day, far better than records set in the 1970s at around 9.5 million bpd.

Total U.S. energy production, including natural gas and renewables, could increase by as much as 31 percent through 2050, though EIA said crude oil production only increases for the first 15 years of that modelling period.

In its latest drilling productivity report, EIA found most of the new oil production for February comes from the Permian and Eagle Ford shale reservoirs in the U.S. south, while the Appalachia basin covering most of West Virginia and Pennsylvania adds most to natural gas production.

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