The number of rigs targeting oil and natural gas in U.S. tight sands and shale plays saw a significant drop during the week ending May 20, while oil and gas prices hovered in their recent comfort zones, according to NGI's Shale Daily Unconventional Rig Count.
For the week, 951 rigs were actively targeting oil or natural gas in unconventional plays, which is 18 rigs fewer than the week ending May 13. The largest drops were recorded in the Granite Wash, which runs from the northern Texas Panhandle to western Oklahoma; the Haynesville/Bossier Shale in East Texas and western Louisiana; and the Uinta Basin in Utah.
The Granite Wash dropped eight rigs (10%) to 76, while the Haynesville/Bossier and Uinta Basin dropped seven rigs (5%) and one rig (5%), to 127 and 21, respectively. The largest gains for the week were recorded in the Niobrara-DJ Basin, which added two rigs (40%) to finish the week with seven; and the Arkoma-Woodford Shale, which added one rig (8%) to finish with 14.
The significant drop in rigs was not evident in prices for the week. June crude oil traded up and down on the week, but finished at $99.49/bbl -- just 16 cents lower than the previous week's close. June natural gas had a similar story to tell as the prompt-month contract dropped only 1.6 cents to $4.230 from May 13 to May 20.
While the overall unconventional rig count ended up dropping 2% from the previous week, activity was up 12% from the same week last year.
NGI's Shale Daily Unconventional Rig Count utilizes county-level rig data provided by Smith Bits, a Schlumberger company, to more accurately target drilling levels in individual shale plays (see shaledaily.com).