Natural gas drilling is picking up, with Baker Hughes reporting 11 more rigs this week
Natural gas prices have increased more than 72% in the last six months, and the stronger economics have spurred more drilling, according to information released by Baker Hughes (ticker: BHI). The rig count increased by 15 in the week ended October 14, but 11 of those addition rigs were targeting gas, a change in the pattern seen recently.
With oil prices back above $50 per barrel, the rig count has been steadily climbing higher as more operators look to increase production and take advantage of stronger returns. This week, however, it appears that gas is the goal, with just four of the new rigs targeting oil.
The total U.S. rig count reached 704 this week, still down 264 from this time last year. The number of rigs drilling for oil reached 432, while those targeting gas rose into the triple-digits, ending the week at 105.
The Cana Woodford saw the largest increase on a basin-by-basin basis, with four additional rigs compared to last week. The total number of rigs in the play now totals 39, three more than this time last year. The Cana Woodford is currently the only U.S. basin with more rigs in it now than at this time last year.
The DJ, Haynesville and Marcellus each reported two additional rigs this week. The Permian Basin, which remains the most active in the U.S., reported two fewer rigs this week compared to last, with 201 total. The largest decline this week was in the Eagle Ford where four rigs were laid down and 31 remain operating.
