March 17, 2025
The U.S. oil and gas rig count remained unchanged this week at 592, according to the latest Baker Hughes report. While oil-directed rigs increased by 1 to 487, gas rigs declined by 1 to 100, reflecting a cautious drilling environment amid shifting market dynamics. Year-over-year, the rig count is down 37 rigs (6%), as energy firms continue prioritizing capital discipline, shareholder returns, and efficiency over aggressive expansion.
Meanwhile, the EIA projects record-high U.S. crude and natural gas production over the next two years, driven by strong LNG demand and increasing power consumption from data centers. However, industry leaders at CERAWeek warn that infrastructure constraints could pose long-term challenges.
Key Takeaways:
- Oil-directed rigs: +1 to 487 (down 23 from last year)
- Gas-directed rigs: -1 to 100 (down 16 from last year)
- Land rigs: 576, unchanged
- Offshore rigs: 14, unchanged
- Inland water rigs: 2, unchanged
- Miscellaneous rigs: 5, unchanged
Regional Rig Activity:
- Oklahoma: +2 to 51
- New Mexico: -3 to 102
- Permian Basin: -2 to 299
- Eagle Ford: -1 to 42
- Williston Basin: +1 to 33
Market Outlook & Industry Sentiment:
- Oil Prices & Production: Despite stable crude prices expected in 2025, the EIA projects U.S. crude production to hit record highs for the next two years before plateauing later in the decade.
- Natural Gas Outlook: The EIA forecasts a 73% increase in gas prices in 2025, which could incentivize more drilling after a 14% price drop in 2024. U.S. gas production is projected to rise from 103.2 bcfd in 2024 to 105.2 bcfd in 2025 and 107.5 bcfd in 2026.
- LNG & Power Demand: Soaring LNG exports and growing data center energy consumption are driving record gas demand. However, industry executives at CERAWeek warn that infrastructure bottlenecks could pose long-term challenges.
The flat rig count reflects a cautious approach by U.S. producers, balancing capital discipline and shareholder returns with the need to sustain future output. Gas drillers, in particular, may ramp up activity if prices rebound as expected in 2025.
