Since October, rig counts in the Fayetteville have been stable at around 30 units.  This trend is likely to continue since a majority of capital going into the play is directed at development drilling.  Southwestern Energy has been the most active operator with an average of 13 rigs in recent months.  ExxonMobil’s XTO subsidiary and Chesapeake have also been active in the play.  Its subsidiary contractor, Desoto Drilling, performs most of Southwestern’s drilling.  Other contractors active in the play include Union Drilling, Nomac and Keen Energy Services.

Persistently low natural gas prices have weighed on drilling activity in the Arkoma Woodford, the legacy Woodford play, in recent months.  Since yearend, the number of rigs drilling in the play has fallen by four to 18 rigs.  On a positive note, rig levels may find support now that two majors, BP and ExxonMobil, are some of the most active in the play.  Cactus has been the most active contract driller in recent months with seven rigs.

Drilling activity is picking up in South Texas, home of the Eagle Ford Shale. While The Land Rig Newsletter Biweekly Report currently does not break out rig count details on the Eagle Ford, the latest issue did note that an additional 11 rigs (13%) found a home in South Texas, raising the region’s total to 83.

Eagle Ford interest appears to be spurring a flurry of permitting activity as well. The South Texas region logged a surge in permits at mid-January, more than double prior biweekly reports and the highest level since a comparable surge in late October 2009.

The region posting the biggest gains in rig count is ArkLaTex, according to the latest Biweekly Report, as operators continued to seek opportunities in two of the five major gas shale plays—the Haynesville and the Fayetteville. Recent ExxonMobil acquisition target XTO added four rigs to the Fayetteville, bringing its tally there to nine.

As has been the case for much of the year, gas shale plays were the main story at the end of the year. Even as the traditional (>5,000 ft) U.S. rig count slipped in sequential biweekly periods for the first time since end-September, the tally of rigs drilling in the five major gas shale plays remained fairly steady as of December 31.

In November, the collective rig count for the five major gas shale plays topped 300 and since then has stayed near that milestone, matching a level last seen in January 2009. The dramatic year-long gains in the Haynesville and Marcellus have been noted, as has the steady drilling pace in the Fayetteville and Woodford in second half 2009. Meanwhile, the Barnett—hardest hit among gas shales in the downturn—has quietly extended a rig-growth trend since the end of summer. The play now has 78 active rigs, a 142% increase in rig count over the past 18 weeks.