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  • Drilling Activity Increasingly Concentrated Among Larger Fleets

    Drilling activity is increasingly concentrated among the larger fleets, according to The Land Rig Newsletter’s latest Biweekly Report. The number of operators running 10 rigs or more is the biggest in recent memory at 42. For the past year or so, that tally has generally been in a range of 32–35. As a group, the ≥10-rig operators are nearing a 60% market share and now stand almost 7 percentage points higher YOY. The average number of rigs run by this group also is higher, at 26, compared with 25 this time a year ago. Bear in mind that certain companies that used to be stalwarts in this category, such as Petrohawk, XTO, and Atlas, no longer exist. This increasing concentration of active rigs in the bigger fleets reflects the relentlessly expanding role of unconventional plays, where the midsize and larger, mostly public, companies focus their efforts. If these plays are also attracting the credit that otherwise still seems tight for small, private operators—which could help account for that group’s dwindling market share.

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  • Drilling Not Letting up in Haynesville

    From The Unconventional Drilling Report with data as of October 21, 2010:

    We keep hearing talk of drilling activity slowing in the Haynesville, but the numbers aren’t bearing that out when you factor in East Texas. True, the core Louisiana Haynesville has dropped about a dozen units since its summer peak. But the East Texas side of the play has rebounded almost to its 3Q peak and is seeing full rig utilization. SM Energy alone added 3 rigs since the prior biweekly period, while EXCO hiked its count by 2. EOG, ExxonMobil, and Devon also added rigs. Some recent farm-in deals, evidently oblivious to slumping gas prices, could be driving some of this revived action.

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  • Little Guys Ceding Ground

    From the Biweekly Report with data as of February 12, 2010


    The little guys continue to cede ground to the bigger public companies as drilling activity continues to shift more to unconventional oil and gas plays and away from shallow oil drilling. The tally of rigs drilling to less than 5,000 ft fell by 28 overall, led by declines in the shallow oil rig counts of 17 in the Midcontinent region and 6 in the Permian Basin region. Those decreases roughly paralleled drops in rig counts of 28 among privately held companies and 30 among operators running three or fewer rigs.

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  • Fuzzy Outlook for Gas Drilling

    From the Biweekly Report with data as of January 29, 2010


    The drilling picture remains fuzzy for now. Since more than 65% of the active rigs are drilling for natural gas, and since we’re deep in the heating season, we wanted to spend a little time on the underlying fundamentals of this important commodity this time. It was only a few weeks ago that everyone was talking about the massive surplus of gas in storage. In mid-December, the YOY surplus stood at over 400 Bcf. As of last week, the surplus was reduced to 120 Bcf. Amazing what a few weeks of cold weather in the right places can do. However, weather forecasts look a little hazier. NOAA’s 3-month forecast calls for much colder than normal across most of the South. While this may stoke some extra demand regionally, this will likely be more than offset by warm weather in the Upper Midwest. Furthermore, predictions for the Northeast or Mid-Atlantic don’t lend much help either. Consequently, we view weather as a mixed bag through the end of March.

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