Baker Hughes Says Oil, Gas Rigs in the US Have Reduced Significantly

A recent report by energy technology company Baker Hughes reveals that U.S. energy firms have slashed the number of active oil and natural gas rigs to their lowest levels since the beginning of the year. According to the report, the number of oil rigs fell to 474, while natural gas rigs remained unchanged.

This week’s drop lowers the total rig count by 4% compared to the same period last year. Significant reductions occurred in key regions.

The largest oil-producing shale play in the country, the Permian Basin, saw the number of active rigs fall to 285. In the Gulf of Mexico, drillers shut down 3 rigs, leaving just 9 in operation. Meanwhile, the Denver-Julesberg basin which spans Colorado, Kansas, Nebraska, and Wyoming, saw its count decline to 5 rigs. New Mexico’s total rig count dropped to 96, the lowest since April 2022.

Overall, the number of active rigs in the U.S. is at its lowest point since 2021. This trend is consistent with the broader decline observed in recent years, with rig counts falling by 20% and 5% in 2023 and 2024, respectively.

Major companies like Matador Resources, Diamondback Energy and Coterra Energy have each announced further reductions in rig activity.

Since rig counts are considered a leading indicator of future production, these reductions suggest that producers are responding to falling oil and gas prices by focusing less on increasing production and more on debt repayment and growing shareholder returns. However, in a somewhat contrasting development, the U.S. Energy Information Administration still projects that crude oil production will rise to roughly 13.4 million barrels per day this year.

This is slightly below the agency’s previous outlook, reflecting concerns that U.S. tariffs, weaker prices, and global economic uncertainty could dampen future demand. The agency also anticipates gas production to reach 104.9 billion cubic feet per day this year.

Meanwhile, the top oil-producing state in America; Texas, is experiencing a sharp decline in drilling activity. The state reported its lowest number of new drilling permit applications in 4 years, with only 570 applications being submitted last month. This is quite a drop from the 795 applications submitted in March and its lowest figure from February 2021.

This decline in permit activity reflects growing uncertainty among producers, who are increasingly cautious about launching new drilling projects. Primary concerns driving this hesitancy are worries that a potential trade war could slow global economic growth and reduce demand and fears that a global supply glut could saturate the market and depress prices.

Any easing of the current macroeconomic uncertainties could put the industry back on firm footing and give enterprises like GEMXX Corp. (OTC: GEMZ) a path to offering greater shareholder value.

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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