By Liz Hampton

DENVER (Reuters] – Oil prices in the United States are rising to $100 per barrel. Producers from high-cost shale areas have been buying property and adding rigs, crews and rigs to places where they were silent two years ago when oil prices plummeted.

The benchmark U.S. price of a barrel last week was $93 per barrel. This is an increase of around 65% over the past 52 weeks, and it’s the highest level since 2014. U.S. oil producers are increasing their consumption at double-digit levels as demand for fuel has soared. They also fear that OPEC may punish them again by flooding the market in cheaper crude.

Executives believe that current high oil prices, coupled with low costs for service, make the production economy one of the most attractive in recent years. In a bid to offset rising labor costs and increase in prices, U.S. firms are purchasing U.S. pipeline and oil processing competitors.

“Drilling economics today are better than they’ve ever been since the shale revolution started,” said Chris Wright, chief executive officer of Liberty Oilfield Services (NYSE:). He said that close-held companies are driving up output in particular.

There is new activity in secondary oilfields such as Colorado’s DJ Basin or Wyoming’s Powder River. Louisiana has Haynesville. North Dakota’s Bakken shales, which lost its position last year as the country’s second-largest oil producer region, are also showing signs of life.

(For a graphic of oil production in secondary basins, click here: https://graphics.reuters.com/USA-OIL/PRODUCTION/lgvdwxxeopo)

ACQUISITIONS SPUR INPUT

Cowen analyst reports that U.S. independent producer spending budgets are 13% higher than a year ago. Haynesville, a natural gas-rich secondary field, is the one that has fully recovered output after the 2020 oil price crash. Additional shale oil fields are also adding to their holdings and rigs, including the second largest producing oilfield.

Bob Phillips, Chief Executive of Crestwood Equity Partners (NYSE:) Partners, stated, “When you take a look at oil prices in Bakken, it’s close to $90 a barrel.” This doesn’t happen often.

Crestwood has completed an $1.8 Billion deal last week to acquire Crestwood Oasis Midstream Partners (NASDAQ:) has oil, gas and processing assets in North Dakota & Texas. This is part of an overall plan to become the top-three Midstream Operator in Bakken and Powder River shale areas.

Andrew Dittmar of Enverus Energy Tech, who specialises in mergers and purchases for the energy sector, stated that Shale deals could result in more production.

He stated that “most private selling companies” are those who bring both production and inventory to the table.

Continental Resources (NYSE.) made numerous acquisitions in Wyoming’s Powder River Oilfield since last January, including the most recent from Chesapeake Energy. Crestwood’s Phillips said that the purchase would help revive the region’s production.

Continental plans to publish its fourth-quarter results next Wednesday, but hasn’t yet made public its 2022 plan or budget.

ALL PRICES BENEFIT

Ben Dell, managing director at Kimmeridge Management and interim chief executive officer at Colorado’s Civitas Resource, stated that all basins are benefiting from the higher prices of oil and natural gas.

He said that the DJ was a particularly successful business. Dell believes that the price increases could cause too many production and lead to excess supply.

According to U.S. government data, Haynesville Shale in East Texas, Louisiana and Texas will produce a record 14.1 million cubic feet each day.

Production forecasts for some regions have been too low because of the rapid increase in output. Based on 37 active rigs, East Daley Capital data and analysis company had predicted Haynesville’s output to rise by 12%.

It now has 42 wells, which is five more than the company expected. Rob Wilson from East Daley, vice president for operations said “There are further upsides to our current forecast.”

A ROOM FOR RUN

However, other than Haynesville, the Permian and Haynesville, peak oil production is still low. Bakken producer Hess Corp (NYSE:). It aims to boost its total production by 12 to 15%, driven by Guyana and Bakken outputs. Chevron (NYSE) will increase its Permian oil shale production by 10%. Exxon (NYSE) stated that it can deliver 25% more oil from its Permian holdings.

Bakken oil production is approximately 1.2 million barrels per daily (bpd), lower than its peak of 1.52 million BPD in late 2019. The Eagle Ford Shale in South Texas is producing an average of 1.1 million barrels per day, which is lower than the peak of 1.7 million bpd at the beginning 2015.

According to Mizuho analysts, U.S. producers are currently adding three new rigs each week. However, they will need to increase production by 11 per week to maintain current levels.

Ron Ness from the North Dakota Petroleum Council’s trade group stated that supply chain issues could hinder production gains in this year and could also limit returns for investors seeking higher returns.

He stated that unless $100 oil is added to the mix, it’s unlikely we’ll see 1.5 million barrels per hour again in the Bakken.