US Sees Jump in Weekly Gas Rig Count

The weekly natural gas rig count went up by 11, to 105, during the week ending October 14, 2016 according to Baker Hughes, the US Energy Information Administration said October 20. Of the total, 34 are active in the Marcellus, 16 in the Haynesville and 15 in the Utica.

This is the largest increase in natural gas-directed rigs since the week ending October 31, 2014, when they went up by 14. Although this is the fourth consecutive week that Baker Hughes reported week-on-week increases in the number of active natural gas rigs, the current number in operation is still below last year's total of 192 at this time.

It is equal to only about a quarter of the recent peak of 401 natural gas rigs in operation in September 2013, the EIA said. Natural gas-directed rigs peaked at 1,606 in summer 2008 but wellhead prices were higher then and companies in the US were planning major LNG import terminals. Gas traded well above $6/mn Btu for most of the year and peaking a little above $10/mn Btu. 

In contrast, Nymex Henry Hub November 2016 natural gas futures settled at $3.141/mm Btu October 20 having been weaker for most of 2016 to date.

Most of the new activity this October was in Louisiana but there were two new rigs in the Marcellus. No basins reported a decline in the number of natural gas rigs in operation for the week.

The only major natural gas-producing basins that do not show year-on-year declines in the natural gas rig count are the Utica formation (15 active rigs) and the Arkoma Woodford formation in Oklahoma (4 active rigs). The were four new oil-directed rigs, bringing the total to 432.

Sabine Pass terminal, Louisiana

(Credit: Cheniere)

The Cheniere-operated Sabine Pass terminal is nearing the end of its four-week maintenance of the first two, operating trains. Deliveries through the Creole Trail line were "minimal" nor were there any exports of LNG.

William Powell