According to Baker Hughes, U.S. oil rig counts increased to a new three year high level through the week ending Jun 15^th. Jun 15^th week ending U.S. oil rig counts increased 0.1% from the previous week while remaining higher on a YOY basis for the 76^th consecutive week, finishing up 15.5%. Jun 15^th week ending crude oil production increased to a new record high level however oil production per rig remained near recently experienced seven month low levels. Crude oil production is expected to continue to strengthen throughout coming months according to drilling productivity estimates compiled throughout areas accounting for 95% of recent production gains.

Oil Rig Counts Followed Crude Oil Prices Lower but Have Rebounded Since Mid-2016

Oil Rig Counts Peaked in Late 2014, Prior to Declining Sharply in Early 2015

Jun 15^th Oil Rigs Finished up 0.1% Week-Over-Week and 15.5% YOY

The Declines in Oil Rig Counts Since the Nov ’14 Peak Remain Significant

Declines in Vertical Rigs Remain the Most Significant on a Percentage Basis

Jun 15^th Weekly Crude Oil Production Increased to a New Record High Level

Jun 15^th Crude Oil Production per Rig Remained Near Recent Seven Month Lows