It seems as if The Land Rig Newsletter team can’t publish an issue of The Unconventional Drilling Report without acknowledging yet another milestone. UDR active rig counts have hit new highs for both total shales (687) and total unconventionals (at 805, surpassing 800 for the first time). The UDR also has a new record for the number of oil-directed rigs among both total shales (234) and total unconventionals (257), as well as a fresh peak for unconventional horizontals (680).
None of this dissuades the LRNL team, however, from their central thesis that tailwinds including low gas prices and drilling services capacity/takeaway constraints will slow growth in unconventional drilling this year. The signs are already at hand: The UDR’s YTD average unconventional active rig count is up only 3% from 2H 2010’s average but 50% higher than 1H 2010’s average. In addition, new environmental regulatory hurdles could add more tailwinds to unconventional drilling growth, in the wake of Chesapeake’s apparent wellhead breach and subsequent spill of flowback fluids during a Marcellus frac job in Pennsylvania last week.