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Message: Drilling activity down

Drilling activity down

posted on Jan 05, 2009 07:48AM

Oil&Gas Drilling sector is down today including TDG. Not so good news on drilling activity. Jurek

Barnett Shale Drilling Down by 26% Since October

The number of drilling rigs active in the Barnett Shale finished the year down 26 percent from its peak in early October, mirroring a decline in drilling nationwide as natural gas prices have plunged amid worries about weak demand.

There were 159 rigs operating in 14 North Texas counties as of Dec. 26, according to the most recent report from RigData. That was down 12 from the previous week and down 55 from the 2008 peak of 214 active rigs in the Barnett.

It’s the biggest sustained decline in the Barnett since late 2001, when there were fewer than 100 rigs, according to RigData. Drilling in 2008 generally remained above 200 rigs until recently.

Nationally, the rig count fell by 98, or 5.7 percent, said Baker Hughes, a Houston-based oil-field services and equipment firm that has tracked North American drilling for decades. That was the biggest one-week drop since 1993 and left the U.S. rig count down 20 percent from its yearly high.

Rigs exploring for natural gas accounted for 80 of the idled rigs in the past week, Baker Hughes said. There were 1,267 rigs looking for gas, down 21 percent from the 2008 high of 1,606, on Aug. 29.

Overall, 1,623 rigs were active both onshore and offshore in the United States, Baker Hughes said. That peaked in 2008 at 2,031, in September.

What’s happening

Natural gas futures have plunged since peaking at $13.58 per 1 million Btu in July. On Friday, gas settled at $5.97.

Drilling has declined faster than was predicted just two months ago.

As recently as Oct. 24 there were 205 active rigs in 16 Barnett counties, according to RigData. At the time, Richard Mason, publisher of Land Rig Newsletter in Lubbock, said he expected to see the rig count fall as much as 20 percent in the first quarter of 2009.

Last month, Mason updated his forecast, saying the rig count could drop as much as 30 percent and predicted "the most difficult drilling environment in 10 years."

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