September 28, 2010


Rigs drilling in unconventional resource plays now comprise 48% of U.S. land rigs, according to the latest issue of The Unconventional Drilling Report. That’s impressive when one considers that the unconventional share was 43% last quarter and just 39% in 3Q 2009.  Much of the growth comes from three plays: Eagle Ford, Bakken, and Marcellus.  These plays have put a combined 134 rigs to work this quarter alone.  Notably, strong growth in the Eagle Ford and Bakken underpins recent market share gains for oil-directed activity.  Oil-directed drilling now represents 29% of shale activity, up from 26% in mid-July.

Recent permitting suggests ongoing support for drilling across most unconventional resource plays.  Two notable exceptions are the Fayetteville and Woodford shales.  Clearly, operators’ thirst for liquids will continue to drive rigs to the Bakken and Eagle Ford.  Other resource plays that could see more rigs include the West Texas Wolfberry, the Granite Wash, and the Niobrara.

September 21, 2010


U.S. land rig counts seem to be tracking increasingly bearish macroeconomic signals. After jumping by 48% from bottom last year to the first of this year, the land tally’s growth rate has slipped.

Looking at changes in rig counts in The Land Rig Newsletter’s Biweekly Report, the rate of sequential increase between periods (averaged over a month) has fallen by almost 40% since the first of the year. And September’s first tally change entered negative territory. It’s not difficult to find a culprit in the case of the softening rig count: The latest tally of rigs drilling for natural gas, while up 10% since the year’s start, is down 10% from the year’s peak, set in July. Were it not for the oil rig count being up 77% since the first of the year, we’d be tossing around words like “slump” instead of “plateau” to characterize the overall rig count. 

September 14, 2010


The unconventional rig count as tallied by The Unconventional Drilling Report slid by 8 the week ended September 3, ending a four-session upward trend at the same time.  Declines were varied and widespread.  Could this be an inflection point?  In a word: Maybe.  Recent counts have hinted of shifting momentum.  The South Texas Eagle Ford, which picked up an astonishing 10 rigs, is a notable exception. The Eagle Ford rig count soared to 103 units last week, up from 93 in the prior period. Karnes and Gonzales counties picked up 5 and 3, respectively.  EOG and ConocoPhillips accounted for half of the 10 rigs added during the period.

Meanwhile, Pennsylvania has a new exploration area in Lancaster County.  Williams spudded a gas well there at the end of August. The well is being drilled with a 750 hp rig and marks the first test in southeastern Pennsylvania that The Land Rig Newsletter team is aware of. 

September 7, 2010


Further evidence of a plateau is emerging in U.S. drilling activity: the traditional rig count (those rigs drilling to below 5,000 ft), as tallied by the latest issue of The Land Rig Newsletter’s Biweekly Report, retreated from its climb toward 1,500, a level unattained since 2008. A drop of 10 units in this metric from the prior biweekly period accounted for almost the entire decline in the overall rig tally for the week ended August 27.

Just as the unconventional drilling activity has driven the rig count in recent years, it also seems to underpin the emerging plateau. Noteworthy were decreases of 9 in Louisiana, accompanied by a 7-unit drop in the Louisiana core Haynesville, and a surprising reversal in North Dakota, matching the 6-rig fall in the Bakken. The Permian and ArkLaTex regions fell by 15 and 13, respectively, while the Midcontinent picked up 8 rigs as Granite Wash action heated up.