Oil prices, planning, and lots of cost-cutting are yielding positive movement in Gulf of Mexico activity, including the first rig count uptick in years. How much optimism is warranted varies, but at present, things are clearly looking up.
Drilling in the GOM should improve 7.7% to 140 wells, with an 8.3% gain in total footage this year, according to World Oil’s 2019 forecast. That bump follows four years of decline and is made particularly noteworthy—and welcome—after a 17% decline in 2018. However, even with efficiencies that have reduced break-even costs to $40/bbl, the outlook doesn’t foresee a meaningful resurgence in deepwater drilling during 2019 and, perhaps, early 2020.