For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday.
Shale explorers including EOG Resources Inc. and Pioneer Natural Resources Co. say they’re preparing to bounce back from the deepest and most prolonged slowdown in U.S. oil drilling on record. The country has lost more than half its rigs since October, casualties of a 49 percent slide in crude prices during the last half of 2014. Futures rallied above $60 a barrel earlier this week, and a sudden return to oil fields would threaten to end this fragile recovery.
“You’re inviting a lot of pent-up supply to come back into the market — not only do you have people drilling again, but you have this fracklog of over 4,000 uncompleted wells,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by phone. “And then we’re in a situation where the market could easily go back into the mid- $50’s.”