Diamondback and ConocoPhillips Add Permian Rigs as Baker Hughes US Count Hits 563

Baker Hughes released its weekly North American rig count on Friday, June 5, reporting 563 total active rigs in the United States, up one from 562 the week before. Oil rigs increased to approximately 430, while natural gas rigs slipped one to 124. The count has climbed from 547 US rigs on May 1, a gain of 16 rigs in five weeks as operators respond to elevated crude prices driven by the ongoing closure of the Strait of Hormuz.

North America as a whole counted 724 rigs in the Baker Hughes release for the week of May 29, comprising 562 US rigs and 162 Canadian rigs. Canada added 24 rigs week-over-week in that period, led by oil sands and conventional heavy oil activity. Year-over-year, North America is up 49 rigs from June 2025, with Canada accounting for all of that net gain and then some.

Permian Basin Leads the US Drilling Response

The Permian Basin added five rigs in the week of May 29, according to Baker Hughes, and remains the most active US basin. US oil rigs climbed from 408 on May 1 to approximately 430 on June 5, a gain of 22 rigs in five weeks. That trajectory reflects a deliberate reversal by major Permian operators of the capital discipline they maintained from 2022 through early 2026.

Diamondback Energy, one of the three largest pure-play Permian producers, announced it is adding two to three drilling rigs and five hydraulic fracturing crews to its West Texas operations. The company averaged 521,000 barrels of oil per day in the first quarter of 2026, exceeding the top of its guidance range. For full-year 2026, Diamondback raised its oil production target to more than 520,000 barrels per day, up 3 percent from its original midpoint. Capital expenditure guidance rose to $3.9 billion from $3.75 billion.

Chief Executive Kaes Van't Hof stated: "The light has turned green, and Diamondback is well-positioned to respond to the current macro environment." That $150 million capital uplift buys approximately 15,000 barrels per day of incremental oil capacity, a unit development cost of roughly $10,000 per flowing barrel per day. Diamondback concentrates its activity in the Wolfcamp, Spraberry, and Bone Spring formations of the Midland and Delaware sub-basins.

ConocoPhillips and bpX Energy Expand Alongside Independents

ConocoPhillips raised its 2026 capital budget to $12 billion to $12.5 billion and will add one drilling rig in the Permian's Delaware sub-basin in the second half of the year. ConocoPhillips built its Permian footprint through two major acquisitions: Burlington Resources in 2006 and Concho Resources in 2021. That combined acreage in the Midland and Delaware basins is where the additional rig will be deployed.

bpX Energy, the US unconventional subsidiary of BP, is targeting approximately 8 percent shale production growth in 2026, with activity spanning the Eagle Ford, Haynesville, and Permian formations. Continental Resources reversed a previously announced 20 percent capital budget cut and confirmed plans to increase production from its North Dakota Bakken, Oklahoma STACK, and Permian positions. EOG Resources raised its 2026 production target to 1.3 million barrels of oil equivalent per day, adding roughly 8,000 barrels per day of oil above prior guidance.

Margin Math Explains the Capital Rush

WTI crude settled at $90.54 per barrel on Friday's CME close, the July 2026 front-month contract, down $2.50 or 2.69 percent on the session. That settlement remains well above the breakeven cost for new Permian horizontal wells, which industry analysts estimate at approximately $35 to $45 per barrel, including lifting costs. A margin of $45 to $55 per barrel on oil production is the economic driver behind the current rig ramp.

Goldman Sachs characterizes $100 per barrel for Brent as a floor rather than a ceiling through the current conflict period. Goldman estimated that Persian Gulf crude output is down approximately 14.5 million barrels per day, or 57 percent, from pre-conflict levels. US shale is the only source of short-cycle supply capable of replacing meaningful volumes within months, which is why operators are accelerating activity despite Friday's price decline.

Output Forecasts Point Higher, With Caveats

The EIA Short-Term Energy Outlook published May 12, 2026 projects US crude oil production averaging 13.6 million barrels per day for full-year 2026. Goldman Sachs forecasts that Permian Basin output alone will add approximately 270,000 barrels per day in 2026, and that US supply will account for roughly 60 percent of total non-OPEC production growth this year. Both figures assume prices hold in a range that sustains current operator spending plans.

When Oil Authority reported the April 2026 EIA STEO, the agency projected a $96 per barrel average Brent price for the full year, with a Q2 peak near $114.60 per barrel. The subsequent May 2026 STEO raised the Q2 Brent average to $106 per barrel, confirming that the supply deficit deepened rather than eased between April and May. That persistent gap between global supply and demand continues to pull rigs off the yard and into the Permian.