Friday, October 23, 2009

Rig Counts: Little Change

The Baker Hughes weekly rig count revealed little change, as the U.S. count increased by eight and the Haynesville area count (E. TX and N. LA - inclusive of other fields) dropped by one, staying even in Louisiana and decreasing by one in Texas.

In terms of national mix, oil rigs increased by three, gas rigs increased by four and miscellaneous rigs increased by one. By rig type, horizontal rigs increased by seven, vertical increased by three and directional decreased by one.

In poking around the Baker Hughes web site, I noticed some interesting data, summarized on the chart below. It shows natural gas production from vertical, horizontal and directional wells for the past three and a half years. It's no secret that horizontal drilling is the new big thing and production in this area has increased, but what I found interesting (but not surprising) is that with the falloff in gas prices and rig count in September 2008, vertical drilling fell off a cliff and has stayed flat since. Same for directional drilling, although to a lesser degree. Horizontal wells declined but have started to pick up over the past few months. Horizontal production now represents 51% of all U.S. production.

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