January 26, 2010

Oil and gas companies are getting off to a fast start in 2010 as 20 more operators entered the field in recent weeks.  With respect to rig activity, The Land Rig Newsletter Biweekly Report’s first issue of 2010 noted a 6% surge in the overall rig count compared to yearend.
 
The good news is that gains were generally widespread.  The shallow rig count (<5,000 ft) grew as operators sought oil, lifting the count by 41 to 148 rigs, with 32 of the additional rigs chasing oil. The deeper rig count also rose, up 28 to 1,065 rigs. Rigs seeking gas in deeper pay rose by 50 to 758 rigs; however, oil-seeking rigs in the Traditional count (>5,000 ft) dropped by 22 to 307 rigs. Top gains were in the Permian Basin and the Rockies, with increases of 9 rigs and 13 rigs, respectively.  Major unconventionals remain in the driver’s seat—notably the Haynesville, up 10 rigs to 114, and the Marcellus, up 5 to 70.

January 19, 2010

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.

January 5, 2010

Contractors received a welcome Christmas gift—additional drilling demand at the onset of the holidays. In early December, it looked like the year would coast out on a steady rig count, but operators apparently had plenty of yearend money to put to more rigs to work. The U.S. total rig count grew once again in mid-December—to 1,176 rigs, up 45 from last period’s 1,131 rigs. This period saw the number of operators grow to 406 after being flat at 393 for the prior four periods.

The traditional count (>5,000 ft) grew to 1,041 rigs, with more than half of the rigs (551) spudding new wells in the prior two weeks. The largest number of these new spuds was in Texas (241 of 451 rigs) followed by Pennsylvania, which saw 44 of the 69 active rigs chasing well starts; fully 64% of the state’s active rigs started new wells. The Pennsylvania spuds are mainly Marcellus Shale; Texas activity is focused in the Permian basin.