Rigs: The total US rig count increased to 589 for the week of Aug. 8.
Infrastructure: Plains All American plans to bring a 75 Mb/d expansion of Cactus III Pipeline online by the end of August, increasing nameplate capacity to 725 Mb/d.
Supply and Demand: The US natural gas pipeline sample, a proxy for change in oil production, decreased 1.7% W-o-W across all liquids-focused basins for the week ending Aug. 17.
Rigs:
The total US rig count increased to 589 for the week of Aug. 8. Liquids-driven basins increased to 456, up 4 rigs W-o-W.
- Bakken (+2): Continental Resources, KODA Resources
- DJ (+1): Rangeview Resources Operating
- Permian (+1):
- Delaware (+2): Continental Resources, Matador Resources
- Midland (-1): ExxonMobil
Infrastructure:
Plains All American (PAA) plans to bring a 75 Mb/d expansion of Cactus III Pipeline online by the end of August, increasing nameplate capacity from ~650 Mb/d to 725 Mb/d. The project, announced in PAA’s 2Q26 earnings, follows management’s 1Q26 commentary that Cactus III retained additional expansion capability, and would phase future additions alongside market demand and commercial commitments.
The expansion comes as the pipelines that comprise the Corpus Christi corridor (Cactus I, Cactus II, Cactus III and Gray Oak) have been highly utilized. Strong Permian production and demand for access to the Corpus Christi export market have kept these assets running near capacity. Corpus offers shippers access to deepwater export terminals, competitive waterborne pricing and a broad base of international buyers.
On a 12-month average basis, East Daley estimates utilization at 90% of nameplate capacity on Cactus I, 100% on Cactus II, 91% on Cactus III and 89% on Gray Oak. Over the most recent three months of data, utilization increased to 96%, 101%, 101% and 96%, respectively, underscoring the limited spare capacity available through the corridor.
The Cactus III expansion also carries acquisition-related economics that could influence the pace of future capacity additions. When Plains acquired EPIC Pipeline, which it subsequently renamed Cactus III, the transaction included potential earnout payments tied to future expansions. PAA agreed to pay the Ares-affiliated seller up to $157MM based on the timing and amount of incremental capacity sanctioned above a 650 Mb/d base, tied to potentially 300 Mb/d of new capacity through YE28.
With the first 75 Mb/d expansion now sanctioned, Plains disclosed a ~$40MM earnout associated with the project. While management did not explicitly identify the recipient on the earnings call, the payment is consistent with the capacity-based incentive structure established as part of the EPIC acquisition.
A separate $193MM earnout payable to Kinetik (KNTK) and Diamondback (FANG) could be triggered if Plains sanctions an expansion that increases Cactus III capacity to at least 900 Mb/d before YE27 and satisfies related minimum contracting requirements. Those requirements include sufficient incremental contracted capacity, minimum rate thresholds and minimum contract duration.
Reaching 900 Mb/d would require another 175 Mb/d of capacity beyond the current expansion, and likely depends on a meaningful acceleration in Permian production growth and additional long-term shipper commitments.
The 75 Mb/d project highlights both tightening Permian takeaway capacity into Corpus Christi and the low-cost expansion optionality that Cactus III brings to Plains. Moving from 725 Mb/d toward the 900 Mb/d earnout threshold would require materially stronger commercial support and a more constructive Permian production outlook. Under East Daley’s current forecast, the 900 Mb/d threshold appears unlikely to be reached before YE27.
Supply and Demand:
The US natural gas pipeline sample, a proxy for change in oil production, decreased 1.7% W-o-W for the week of Aug. 17 across all liquids-focused basins.
Volumes decreased notably in the Permian (-7.9%), with slight W-o-W decreases in the Anadarko (-1.7%), Arkoma (-1.5%) and Rockies (-0.6%). Volumes increased in the Barnett (9.6%), Eagle Ford (4.7%), Williston (0.2%) and Gulf of America (0.1%). The Rockies and the Gulf of America have a high correlation between gas and crude oil volumes, whereas the Permian and Eagle Ford basins’ correlation is less than 45%.
As of Aug. 17, there are no refinery outages.
Vessel traffic monitored by East Daley along the Gulf Coast notably increased W-o-W. A total of 37 vessels were loaded for the week ending Aug. 15, an increase of 10 from the prior week.