US natural gas rig count
In the week ending November 25, 2015, there were 189 operating US natural gas rigs. This was four less than the week ending November 20. In this part, we’ll discuss the key shales where natural gas rigs were impacted the most by the fourth week of November. First, we’ll interpret the numbers.
Year-to-date rig count
Since the beginning of 2015, the number of natural gas rigs in operation fell by 139, or 61%, as of November 25.
What does this mean?
A fall in the natural gas rigs suggests that natural gas producers like CONSOL Energy (CNX), Southwestern Energy (SWN), Linn Energy (LINE), WPX Energy (WPX), and Pioneer Natural Resources (PXD) could be reducing their drilling activities. This could eventually lower the natural gas production. Pioneer Natural Resources accounts for 0.1% of the SPDR S&P 500 ETF (SPY).
If natural gas production falls, MLPs specializing in natural gas storage and transportation activities like AmeriGas (APU), DCP Midstream (DPM), and ONEOK Partners (OKS) could potentially lose revenue.
Natural gas rigs have been on a falling trend for about four years. The number of active natural gas rigs fell over the past 12 months as of November 25, 2015. Last year, there were 344 natural gas rigs in operation. Currently, there are only 189 active rigs. This is a fall of 155 rigs or ~45%.
In the next part of the series, we’ll discuss the key natural gas shales as of November 25, 2015.