The shale development frenzy of the last couple of years has cooled dramatically in recent months as natural gas prices, and more recently crude and natural gas liquids prices, have plummeted. Out of the 13 U.S. plays for which NGI‘s Shale Daily tracks unconventional rig counts, nine are showing a lower level of drilling activity than one year ago, with most of them recording a drop of 30% or more.
Analysts have attributed the declining prices and rig counts to a mild 2011-2012 winter and overflowing storage built up by the increased production from unconventional plays.
According to NGI‘s Shale Daily Unconventional Rig Count for the week ending July 13, total unconventional drilling for oil and gas in the 13 plays is down 7% from the similar week a year ago, from 984 rigs to 913 rigs. The only four plays with an uptick in rig activity from one year ago were the Niobrara-Denver Julesburg Basin, the Eagle Ford Shale, the Bakken/Sanish/Three Forks play and the Uinta Basin.
Due to the limited amount of drilling in the Niobrara-Denver Julesburg Basin, the play recorded the largest percentage increase in activity year-over-year in rising 175% from four active rigs to 11 active rigs. The second largest percentage increase was found in the Eagle Ford Shale, which jumped 29% from 197 rigs to 254 rigs over the same period.
The largest year-over-year declines could be found in the Haynesville/Bossier and the Arkoma-Woodford. The Haynesville/Bossier — a largely dry gas play — dropped 69% over the one-year period from 118 rigs to 37 rigs, while the smaller Arkoma-Woodford declined by 50% from 16 rigs to eight rigs for the just-completed week.
NGI‘s Shale Daily Unconventional Rig Count utilizes county-level rig data provided by Smith Bits to more accurately target drilling levels in individual shale plays.
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