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Why the drop in drilling does not reduce production

Почему падение буровых не приводит к снижению добычи

The final stretch of the shale revolution. The fall in the number of working oil rigs in the U.S. is happening at the fastest rate in a year, according to Baker Hughes.

It seems that at current oil prices to swing has little sense of meaning. How else to explain the fact that for the last three weeks the decline was 17%. Last week the number of working rigs decreased by 26, a week earlier – on 28 to 31.
The number of oil rigs decreased by 26 to 413

The total number of rigs fell by 27 to 514

And if in 2014 at its peak employed about a thousand installations, it is now just over 400. As usual the leader of decline by state was Texas, because the oil industry is most widely represented there.

However, the oil companies, it seems, with the task of improving the efficiency successfully cope, because last year the volume of production in comparison with the number of rigs is almost not decreased. Although, perhaps it is now the production begins an accelerated decline. Anyway last week the production in the States fell by 0.6% and came close to the lows from 2014.

The reason for stability of production lies exclusively in the increased productivity and efficiency of companies. This in its February report said, and the U.S. Department of energy.

As we can see, compared with last year the volume of production per machine has increased significantly. On the whole, data on the number of drilling is not so important, this is particularly evidenced by the data in the study of Goldman Sahcs. It could be seen that the reduction in capital expenditure results in only a slight reduction in production.

For example, Hess Corp plans to cut capex by 18%, while the company believes production will decrease only on 2%.

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