Gas rig count down
In the US, there were 268 natural gas rigs operating in the week ending March 6, 2015, down by 12 compared to the previous week. In the Marcellus Shale, six gas-targeted rigs were idled last week.
Natural gas rig counts have been on a downward trend for about three years. Yet, the gas-targeted rig count appeared to stabilize in the past six months, increasing ten times in the last 21 weeks. However, any hope of a strong revival received a blow as the number of gas rigs diminished in each of the last five consecutive weeks.
The turmoil in the crude oil sector has negatively impacted energy investors. The decline in the past five weeks’ gas rig count reduced investor expectations of a turnaround. Natural gas production, however, has been on a continuous uptrend.
Gas rigs down in the past year
The number of natural gas rigs decreased throughout the last year. A year ago, there were 345 natural gas rigs. Currently, there are 268 rigs. This is a decrease of 77 rigs, or a ~22% difference. In the corresponding period in 2014, weekly natural gas rig counts dropped by 62, or ~18%.
The number of natural gas rigs in operation suggests how major natural gas producers may be feeling about drilling these days. These producers include Chesapeake Energy (CHK), Cabot Oil & Gas (COG), Southwestern Energy (SWN), and WPX Energy (WPX). Chesapeake Energy and WPX Energy account for 2.3% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Natural gas rigs in major US shales
In the last year, most of the decline in the natural gas rig count occurred in the Eagle Ford Shale, where the number of gas rigs decreased by 17. In the Marcellus Shale, the number of rigs fell by 15. In the last year, the Utica and Permian Shales added two rigs each to their natural gas rig total, the most of any drill site in the US.