Baker Hughes Report Shows Decline in US Oil, Gas Rigs

A recent report released by Baker Hughes shows that energy companies in the U.S. continue to reduce the numbers of natural gas and oil rigs in operation, signalling a continued slowdown in drilling activity.

This past week, the natural gas and oil rig count fell to 539, its lowest number since 2021. Natural gas rigs saw their numbers drop to 108 while 7 oil rigs were shut down, bringing their total to 425. This marks a total decline of 46 rigs, which represents an 8% dip as compared to the same period in 2024.

The rig count is an early indicator of future output and a sustained decline often reflects expectations of reduced production in the near term. The latest report was released on Thursday, as the 4th of July holiday fell on Friday.

Over the past few years, rig counts have seen considerable fluctuation. In 2023, the overall rig count declined by 20%, followed by a 5% drop last year.

The latest dip reflects continued caution from energy companies, many of which are prioritizing shareholder returns and debt reduction over aggressive production growth, particularly in a pricing environment marked by volatility.

Shell, one of the world’s largest energy companies, recently announced it expects losses in its products and chemicals divisions. The company also warned of a potential decline in quarterly earnings, citing weaker trading performance.

Despite the rig decline, projections from the U.S. Energy Information Administration (EIA) expect crude output to grow to roughly 13.4 million barrels per day this year. This comes even as many analysts anticipate lower spot crude prices throughout the year.

On the natural gas front, the EIA forecasted an 84% surge in spot prices for the year, which is expected to encourage producers to ramp up drilling operations this year. This follows a 14% decline in prices last year that led multiple energy companies to scale back production for the first time since the COVID-19 pandemic slashed fuel demand in 2020.

In terms of output, the agency expects natural gas production to rise to 105.9 billion cubic feet per day this year. This is quite an increase, especially when compared to 2023’s output of 103.6 billion cubic feet per day.

The combination of rig reductions and shifting price dynamics highlights an industry at crossroads, balancing market discipline with the potential for renewed growth. Investor sentiment remains mixed amid these evolving market and production trends.

Companies like GEMXX Corp. (OTC: GEMZ) with oil and gas exploration projects within the Latin American region could also be undertaking operational adjustments in light of the existing economic and market dynamics. As these uncertainties are resolved, the firms could attract additional investment that helps to ramp up their operations.

NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ

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