Spending by US oil and gas companies is expected to rebound sharply this year as the industry responds quickly to the upturn in crude prices in recent months.
While the overall recovery in the global oil and gas industry is still sluggish, capital spending in North America will rise 27% this year, according to Barclays, based on a survey of more than 200 companies.
The projections suggest that the larger US exploration and production companies will raise spending on drilling and completing wells most sharply, while spending by the biggest international oil groups will increase more slowly.
The number of UK oil and gas companies becoming insolvent has reached an all-time high, according to a new survey. A total of 16 UK oil and gas businesses became insolvent in 2016, compared with two a year earlier, according to research by accountancy firm Moore Stephens.
The report concluded that without better prices, further insolvencies are likely as firms exhaust their ability to adapt to the downturn.
Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said: “The last 15 years has seen a large increase in the number of UK oil and gas independents exploring and producing everywhere from Iraq to the Falkland Islands. “Unless there is a consistent upward trend in the oil price, conditions will remain tough for many of those and insolvencies may continue,” he added.
The energy company Cuadrilla has started work on a controversial shale gas site in Lancashire that will later this year become the first well to be fracked in the UK since 2011. The site at Preston New Road in the Fylde is one of two rejected by Lancashire county council, but its decision was overturned last year by the communities secretary, Sajid Javid.
Cuadrilla said work was initially focused on building an access road. Over the next three months, it will establish a well pad and site in what is currently a field, the size of a rugby pitch, in the Lancashire countryside. Drilling is expected to begin in the spring, with fracking in the third quarter of the year.
Although Cuadrilla has planning permission for four wells at the site, it will concentrate on drilling a pilot well 3,500 metres deep this year and two horizontal wells. The contract for the construction is worth £1.5m.