U.S. drilling costs start to rise as rig count climbs: Kemp

15 Jul 2017   Shale Oil

U.S. oil and gas exploration and production companies are paying more to hire drilling rigs as the number of rigs still idle after the slump declines. Drilling costs were up by 8 percent in June 2017 compared with their recent low in November 2016, according to preliminary data from the U.S. Bureau of Labor Statistics published on Thursday. The rise in drilling costs has barely started to reverse the previous 34 percent decline reported between March 2014 and November 2016, but it does mark an important turning point in the oilfield services costs cycle. Drilling costs have been rising year-on-year since March and in June were almost 3 percent higher than in the corresponding month a year earlier (tmsnrt.rs/2uqzdEI). Services costs are cyclical and follow changes in the rig count with a lag of a few months, but so far cost increases have been very modest […]

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