Low Gas Prices Slash Horizontal Drilling
Friday, June 01, 2012
The number of drilling rigs working on horizontal gas well projects dropped to 411 on May 25, down from more than 600 last October, according to Baker Hughes Inc.
The U.S. Energy Information Administration (EIA) attributed the decline to slumping prices for dry natural gas. Baker Hughes said the total gas rig count fell six units to 594 while oil-directed rigs increased by one unit to 1383 units.
EIA said most of the drilling drop has occurred in areas of dry shale gas production. For example, in Louisiana home to the Haynesville Shale horizontal gas rigs fell from 110 at the beginning of 2011 to 30 last week. Over the same period, directional and vertical gas rigs were relatively unchanged. As of May 25, those rigs totaled 26 and 19, respectively.
The benchmark Henry Hub price closed at US$2.39/MMBtu last Wednesday on the New York Mercantile Exchange, down 21 cents from the prior Wednesday.
For more information: www.eia.gov