Friday, May 29, 2009

Rig Counts: As of May 29

Decent news in the Baker Hughes rig count. Nationally, rig counts were only down one, but the Haynesville rig count (area broadly defined as N. LA and E. TX, which includes a few other fields) showed a net increase of one rig. North LA saw the rig count increase by three to 78, while East TX saw the count drop by two to 52.

I've been mining the heck out of the recent EnCana Haynesville call, but I thought one slide was particularly interesting in terms of rig counts. The chart below shows how well the Haynesville Play has thrived in the face of plunging rig counts and gas prices. This is a testament to the strength of the field and the operators' need to drill the wells before their expensive leases expire. "Lease expiry" is an expression you are going to hear a lot of, especially if prices stay low past the end of the year. Even if they have to lose money at it, many of the Haynesville Shale producers will continue to drill new wells.

No comments: