Recent weakening of the gas rig count may point to increasing unease about 2010 gas prices and thus a growing attraction for the liquids-rich shale plays, as the outlook for oil prices looks relatively more robust. The oily Bakken continues to surge, of course, while the Eagle Ford has the appeal of a hybrid play, encompassing shale gas, condensate, and oil—perhaps what could be thought of as a built-in “hedging” cushion of sorts as oil and gas prices continue to decouple.
The relative appeal of oil also explains why the Permian Basin registered a strong uptick of 22 in rig count in The Land Rig Newsletter’s Biweekly Report. There’s been significant growth in activity in recent months in the Spraberry Trend. Much of the focus is on another hybrid play—the “Wolfberry,” a multi-frac, low-perm target encompassing together the Spraberry and the underlying Wolfcamp. In late September, the Biweekly Report counted 49 active locations with 29 rigs running in the Spraberry Trend. The latest tally shows 78 active locations with 50 rigs running.