(Reuters) - The U.S. drilling-rig count, which recorded its 26th straight weekly decline this week, is close to bottoming out ahead of a recovery in the second half of the year, mainly in the Permian and Eagle Ford shale plays in Texas, analysts said.
Oil prices are expected to hold roughly at current levels over the next three to six months after OPEC agreed on Friday to stick by its policy of unconstrained output for another six months, but did not raise its output ceiling.
That implied stability is expected to encourage drilling, especially in cost-efficient U.S. shale basins.
More optimistic industry and equity analysts expect companies to put back to work up to 140 rigs by the end of the year. Most, however, expect the rig count to go up by about 50 if oil prices stay in the $55-$65 per barrel range.
Brent crude hit a high of $63.43 on Friday.
At the end of this week, 868 oil and gas rigs were working in the United States, including 27 offshore, according to oilfield services provider Baker Hughes Inc.
That was the lowest number since January 2003, and down by seven from the previous week.
"Most additions (this year) will be focused on the Permian, the No. 1 play right now ... No. 2 is going be the Eagle Ford," said Gabriele Sorbara, an analyst at Topeka Capital Markets.
Breakeven prices for most shale fields have already inched down since oil prices began to slide a year ago, helped by a fall in service costs and ever-improving technology.
The average breakeven oil price in the Permian basin is now about $60 per barrel, while that in the Eagle Ford is about $50, Guggenheim Securities analyst Subash Chandra said.
Oil and gas industry consultancy Wood Mackenzie has said it expects onshore breakeven prices in the United States to fall by an average $10-15 a barrel through mid-2016.
The rig count in the Eagle Ford basin has more than halved from a year earlier. The count dropped by seven to 103 in the last week.
The count in the Permian, which had fallen nearly 60 percent from a year earlier, rose by one to 233 from last week.
"Even within those areas, you are going to have companies focusing on the very best acreage," Cowen and Co analyst Marc Bianchi said.
Analysts said that if oil prices drop to the low $50s, costlier shale plays such as the Bakken in North Dakota and the Niobrara, straddling Wyoming and Colorado, could experience a further drop in activity.
(Additional reporting by Manya Venkatesh and Amrutha Gayathri in Bengaluru; Editing by Ted Kerr)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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