From the Biweekly Report with data as of February 26, 2010


In fact, even as the Eagle Ford has added an average of about 10% to each of the four biweekly shale counts since the first of the year, the major shale tallies without the Eagle Ford are up only 5% total in that same time. Take away the Eagle Ford from the list of major gas shale plays, and the difference is even more marked—and reflects the relative strength in the Bakken. Sans the Eagle Ford, the remaining five major shale gas plays are essentially flat with where they were eight weeks ago—even dropping 12 rigs in the latest biweekly count.

From the February 2010 issue of The Land Rig Newsletter:


Of special note at NAPE was the expansion of the industry’s interest in newly prospective shale resources. In the Rockies, the Niobrara and Mowry Shale formations of Wyoming were touted as successor zones to the Bakken Shale. These zones are 6,000-8,000 ft subsurface and will need a lateral, requiring wells in the 10,000-12,000 ft MD range. Niobrara wells seem to be favored, because their lower cost is easier for independents to afford. Also of interest were two other oil shales, the Atoka in Colorado and the Heath in Montana. Operators in the eastern U.S. and Canada were promoting two shale gas zones, the Elgin Shale in New Brunswick and Utica Shale in New York. Utica potential also extends into Quebec. Other shale plays offered at the show included Montana’s Park and Wolsey Shales and Colorado’s Gothic and Hovensweep Shales. Kentucky’s New Albany Shale was presented as a target, as was the Chattanooga Shale in Tennessee. There were plenty of lesser-known zones also being offered.


The industry is also looking at shale resources elsewhere in the world, which can bring new opportunities for contractors with North American shale drilling experience....

The surge in shallow oil drilling by mom n’ pop operators is winding down, easing growth in the overall rig count. A plunge of 30 rigs drilling for shallow oil offset most of the 39-unit gain in the traditional (>5,000 ft) rig count in comparing the two most recent biweekly periods. Any spillover in 2010 from yearend activity spurred by spending down budgets and holding acreage seems to have dissipated among small, privately held operators.

 

The little guys continue to cede ground to the bigger public companies as drilling activity continues to shift more toward unconventional oil and gas plays and away from shallow oil drilling. The tally of rigs drilling to <5,000 ft fell by 28 overall, led by declines in the shallow oil counts of 17 in the Midcontinent and 6 in the Permian Basin region. Those decreases paralleled rig count drops of 28 among privately held companies and 30 among operators running 3 rigs or fewer. 

The count of rigs for small fleets (3 or fewer) recovered in 3Q 2009—reflecting continued support of oil prices above $60/barrel—and has remained above 400 ever since. But the more recent surge of activity among large-fleet operators is overshadowing the little guys’ work.  Large- (10+ rigs) and midsized-fleet (4-9 rigs) counts are both roughly where they were a year ago, but the big story has been the large fleet’s phenomenal growth beginning in 4Q 2009. The small and large fleets have essentially switched market shares since early fall 2009: The large-fleet market share swelled from about 37% in mid-October to almost 49% in the latest tally, as it added 200 rigs, while the small-fleet market share reversed from almost 46% to about 36%. Given that oil and gas market fundamentals both firmed in the last quarter, one suspects the bigger boys’ greater strength in raising capital had a large role to play in the reversal.

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.

Bigger fleets and deeper wells are driving the overall rig count today. And support for unconventional drilling activity continues to broaden beyond the usual suspects. The overall rig count notched a gain of 38 units vs. the prior biweekly period, as a 48-rig gain in the total Traditional count (>5,000 ft) more than offset a loss of 10 shallow gas rigs.

 

In the Traditional rig count category, oil rigs jumped by 29, gas rigs by 19, and horizontal rigs by 12. The gains or holds were spread across the board for all major shale, tight sands, and coalbed methane plays, with one glaring exception:  the Haynesville, which finally took a breather, dropping 8 rigs in a comparison of biweekly periods.

 

The Haynesville decline was offset by a still-irrepressible Marcellus, adding another 10 units. Meanwhile, the tight sands plays are at their highest rig activity levels in months, topping quarterly averages seen since 1Q 2009.