Upstream Drilling Trends: Permian Resilience and Offshore Expansion
US rig count stabilised at 580 as Permian operators optimised rather than grew. International offshore spending is accelerating with deepwater Brazil and North Sea leading.
Executive Summary
The US rig count stabilised at 580 active rigs in April — essentially flat with March's 577 and well below the 2023 peak of 747. The Permian basin remains the backbone of US upstream activity at 305 horizontal oil rigs, with operators focused on capital efficiency and free cash flow generation rather than volume growth.
Internationally, the offshore segment is accelerating. Deepwater Brazil continues to attract capital as Petrobras executes its ambitious 2025–2029 strategic plan. North Sea activity is picking up as the windfall tax overhang begins to ease with clarity on the fiscal framework.
US Rig Count Detail
April 25 active count: 580 rigs
| Basin | Rigs | MoM Change | |---|---|---| | Permian (TX + NM) | 305 | +2 | | Eagle Ford | 52 | -3 | | DJ Basin | 18 | 0 | | Bakken | 35 | -1 | | Haynesville | 42 | -4 | | Appalachia | 19 | -2 | | Other | 109 | +11 |
The Permian's resilience reflects its dominant economics: Midland and Delaware basin wells require WTI at $42–$52/bbl to break even at the well level (pre-corporate overhead), making them economic at current prices with strong FCF margins.
Capital Efficiency Trend
Major Permian operators (Pioneer, Diamondback, ConocoPhillips) have shifted strategy from rig additions to well optimisation: longer laterals (now averaging 3.2 miles in the Midland), improved completion designs, and pad drilling to reduce non-productive time.
Output per rig in the Permian reached a record 1,842 boe/d in April — up 18% from two years ago — meaning operators can grow volumes modestly even with stable rig counts.
International Offshore Highlight
Brazil Deepwater
Petrobras sanctioned three new FPSO contracts in April worth a combined $8.2 billion. The company is on track to reach 2.3 mb/d of pre-salt production by 2026. The Búzios supergiant field alone will add ~400 kb/d by 2027.
Geosteering relevance: Pre-salt reservoirs in the Santos Basin have complex carbonate geology requiring real-time directional drilling decisions — the exact use case for AI-assisted geosteering platforms like GeoMaster.
North Sea
UK upstream investment rose 12% YoY in Q1 2025 as operators gained confidence in the fiscal framework following the government's announced clarifications on the energy profits levy. Apache, Equinor, and Repsol all sanctioned new infill wells at legacy fields.
Norwegian activity remains robust with Equinor's Johan Castberg field ramping toward plateau production of 220 kb/d expected in H2 2025.
Geosteering Technology Trends
Directional drilling complexity is increasing across all major basins:
- Longer laterals require more real-time formation evaluation to maintain trajectory in target zones
- Child well interference in infill drilling programs demands precise placement relative to parent wells
- Tighter landing windows (< 2m vertical in some Permian targets) push the limits of conventional MWD
- Real-time decision loops are compressing from days to hours as operators expect wellsite geologists to advise on the fly
AI-assisted geosteering tools that integrate LWD data, offset well logs, and seismic in real time are becoming competitive necessities rather than premiums — the market inflection GeoMaster is positioned to capture.
OFS Sector Watch
| Company | Q1 2025 Revenue | YoY | Key Signal | |---|---|---|---| | SLB | $9.1B | +7% | International growth offsetting N.Am softness | | Halliburton | $5.8B | +3% | Completion tools demand robust | | Baker Hughes | $6.9B | +9% | LNG equipment orders surging | | NOV | $2.1B | +4% | Offshore equipment backlog growing |
The OFS divergence is clear: international and offshore outperforming North American land. This matches the rig count data — the US lower-48 market is mature and capital-disciplined, while international operators are in a multi-year upcycle.
Data Sources
- Baker Hughes North America Rig Count — April 25, 2025
- EIA Drilling Productivity Report — April 2025
- Petrobras Q1 2025 investor update
- Wood Mackenzie upstream capex outlook, April 2025
- Company Q1 earnings calls (SLB, HAL, BKR)
This report is published by Greenstone Energy Ltd for informational purposes only. It does not constitute investment advice.