Oil and gas operators will likely add at least 90 more rigs through next year, according to a survey conducted by U.S. contract driller Patterson-UTI, as stronger oil prices boost activity.
Some 40 rigs will be added this quarter, according to the Patterson survey, which polled more than 70 of its customers, while another 50 could be added next year. There are currently 771 rigs operating in the United States, up 229 from a year ago, according to Baker Hughes.
The jump in drilling activity comes as oil prices have climbed to their highest levels in years after Russia's invasion of Ukraine upended global supplies. On Oct. 27, U.S. crude futures were trading around $89.43 a barrel.
"There is potential for more rigs to be added," said Patterson-UTI CEO Andy Hendricks, noting that their survey only captured a subset of the market.
He said the company has been able to raise prices for its equipment and services and is anticipating additional increases next year.
Private operators will account for about half of those fourth-quarter rig additions and add another 20 next year, the survey found.
Patterson plans to add four rigs in the fourth quarter, to average 132 in total. It is currently running 12 hydraulic fracturing fleets and may add a 13th fleet next year.
Patterson-UTI shares rose 9% to $17.65 in late morning trading.
The company reported net income of $61.5 million, or 28 cents per share, for the third quarter, compared with a loss of $83 million, or 44 cents a share, a year ago.
It boosted its forecast for 2022 adjusted earnings before taxes and other items to $650 million, up from about $600 million previously due to improved profitability.
Patterson also increased its capital spending forecast for 2022 to $425 million from $390 million previously, due largely to customer-funded rig upgrades and the purchase of fracking pumps with Tier 4 engines.