Forty-four US onshore-focused oil production companies increased capital expenditures by $4.9 billion, or 72%, in fourth-quarter 2016 vs. fourth-quarter 2015, according to a financial analysis from the US Energy Information Administration.

This increase in investment spending, based on their public quarterly financial statements, was the largest year-over-year increase for any quarter by this group of companies since at least first-quarter 2012.

“Higher oil prices are contributing to an increase in upstream earnings for US producers, prompting some companies to increase their investment budgets. Company announcements and increases in the number of active oil rigs suggest US oil production companies are continuing investment growth in this year’s first quarter,” EIA said. The number of active drilling rigs targeting oil in the US reached 662 during the week ended Mar. 31, up from 525 at the end of 2016, EIA said.

Despite an increase in crude oil prices, cash from operations for this group of companies declined $475 million year-over-year in fourth-quarter 2016 because of lower investment levels over the previous 2 years.

“Significant reductions in exploration and development spending in 2015–16 led to less drilling, which reduced oil production in the fourth quarter of 2016, offsetting increased revenue that came from higher prices,” EIA said. Cash from operations lags capex for these companies because they invest to develop reserves that will increase oil production and cash flow in the future.