[M.D. Holloway]

Originally Posted by BRPORSCHE

Very little new exploration is planned for the Us48 though. Lots of supply is being pushed through to maximize profits. There is going to be a sharp drop in product ion soon. The amount of stacked rigs in the eagle Ford and Permian basin is unreal.

Yup, but there are signs...there are instance of rig count increases...

19 Rig Increase: Is It Idiocy Or The Start Of The End Of The Downturn? - Oilpro

While there are a number of scenarios that may explain the increase in the rig count, the most perverse one is the possibility that this marks the start of the capitulation phase of the current downturn. How is it possible that more rigs and falling oil prices signal the end of the downturn? If producers are putting rigs to work because their existing production is falling rapidly and the companies see revenues and profits falling in the immediate future such that they may not be able to pay their bills, this could be a last-ditch attempt to save their companies. In other words, adding rigs may be oil and gas operators’ “Hail Mary” tries. If so, what could it mean?

It would likely be signaling the start of the decline in domestic production that will eventually bring the world’s oil market back into better balance. That would trigger a rise in oil prices that would begin to heal the industry. Remember, those Hail Mary attempts are usually reserved for the very end of a game with the loser trying to tie or win the game. Their success rate is fairly low, but their attempts are exciting. If the rig count jump does reflect operator desperation, we may be much closer to the bottom of this downturn than people think. Only time will provide clarity on this situation.