Year-to-date counts remain significantly down even though three natural gas rigs were added last week
The U.S. natural rig count increased by three rigs, from 315 to 318, during the week ending July 25. Most of the increase in the rig count took place in the Granite Shale at +2 and regions listed as “others” at +6.
However, natural gas rigs have decreased throughout 2014. At the beginning of this year, natural gas rigs drilling totaled 372. The current natural gas rig count of 318 represents a drop of 54, or ~15%. Most of the decline in natural gas rigs came from the Eagle Ford at -17, Cana Woodford at -14, and other areas outside of the major classified plays at -17.
The drop in natural gas rigs year-to-date (or YTD) represents the continuation of a trend that has been ongoing since late 2011, when natural gas rigs topped 900.
Natural gas rigs drilling can indicate the sentiment of major natural gas producers, such as Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and Range Resources (RRC). Many of these names are also part of energy exchange-traded funds (or ETFs) such as the S&P Oil & Gas Exploration & Production ETF (XOP).
Continue reading the next part in this series to learn why natural gas production continues to increase even as the number of gas targeted rigs fall.