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A top oil and gas producer in West Texas\u2019 booming Permian Basin declared a \u201cgreen\u201d light for the reluctant U.S. energy sector to start churning out more volumes amid the ongoing Iran war and sky-high crude prices.<\/p>\n
Midland, Texas-based Diamondback Energy\u2014the third-largest Permian player after Exxon Mobil and Chevron\u2014said it is adding both fracking (hydraulic fracturing) crews and drilling rigs to West Texas. Large oil producers have hesitated to make long-term capital decisions based on a potentially short-term war. But the conflict is dragging on, and the ripple effects of higher prices will last for many months after it eventually ends. The U.S. benchmark for oil was $105 per barrel on May 4\u2014an 85% increase since the beginning of the year.<\/p>\n
Diamondback, a bellwether for the U.S. oil industry, launched a \u201cstoplight\u201d system a year ago when it called for an approaching \u201cred light\u201d and said U.S. shale oil production had likely \u201cpeaked\u201d amid President Donald Trump\u2019s tariff war and a jump in OPEC production.<\/p>\n
A year later, OPEC is bottlenecked because of the effective closure of the Strait of Hormuz through which 20% of the world\u2019s oil and liquefied natural gas typically flows.<\/p>\n
\u201cWhile our \u2018stoplight\u2019 analogy for the macro environment served its purpose over the last year, we are going to put it on the sidelines for now as the light has turned green, and Diamondback is well-positioned to respond to the current macro environment,\u201d said Diamondback CEO Kaes Van\u2019t Hof on Monday in a letter to shareholders.<\/p>\n
Diamondback said its Permian oil production averaged 521,000 barrels per day in the first quarter, which was above even the high point of its guidance at 512,000 barrels. Diamondback said it will continue to churn out 520,000 barrels per day or more through the rest of the year. The company\u2019s midpoint guidance for the year previously was 505,000 barrels.<\/p>\n
\u00a0\u201cPrices for physical delivery of crude oil and refined products have increased even further, with some regions around the world already seeing shortages and demand destruction,\u201d Van\u2019t Hof wrote. \u201cTherefore, we believe there is a legitimate supply-demand imbalance and that the associated price signal is the catalyst to begin to grow production.<\/p>\n
\u201cBecause of our positioning, our preparation and this price signal, we are bringing incremental barrels to the market immediately,\u201d he continued.<\/p>\n
Last year, Diamondback cut its drilling rigs from 17 rigs to 13 amid the approaching \u201cred light.\u201d Having operated 15 rigs early this year, Van\u2019t Hof said the company will now grow to 17 or 18 rigs.<\/p>\n
As for its well completions\u2014or fracking\u2014crews, Diamondback will go from four to five crews.<\/p>\n
An initial focus is on fracking previously drilled oil wells, called DUCs (drilled but uncompleted), to quickly hike oil output. But Diamondback is adding more drilling rigs to replenish activity and build its DUCs back up.<\/p>\n
Thus far in the industry, the overall rig count has remained relatively flat since the war began. Some private companies have increased drilling and fracking activity, such as Continental Resources, but the bigger publicly traded players have maintained their previously set capital spending plans thus far.<\/p>\n
However, Diamondback has decided to hike its 2026 capex incrementally from $3.75 billion to $3.9 billion.<\/p>\n
Including natural gas production, Diamondback plans to churn out at least 972,000 barrels of oil equivalent per day this year, up from its previous midpoint guidance of 944,000 barrels. That places Diamondback just behind Chevron, which is maintaining output at just over 1 million barrels of oil equivalent daily.<\/p>\n
The far-and-away Permian leader, Exxon, was already planning to grow from 1.7 million barrels daily to 1.8 million barrels this year\u2014eventually hitting 2.5 million barrels by 2030.<\/p>\n
#Top #U.S #oil #producer #declares #green #light #drilling #oil #Iran #war<\/p>\n","protected":false},"excerpt":{"rendered":"
A top oil and gas producer in West Texas\u2019 booming Permian Basin declared a \u201cgreen\u201d…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[604,517,3425,5117,1804,7780,5361,376,1225,303,2708,187,722,684],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/5525"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5525"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/5525\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}