Monday, March 25, 2013

Number Of Gas Drilling Rigs In PA Drop 31% From One Year Ago But Gas Production Surges 69%

The number of gas drilling rigs in Pennsylvania reached 116 in the summer of 2011 but has fallen steadily, as the price of gas hit bottom in April 2012.  Last week, 68 drilling rigs were operating in Pennsylvania.

The current 68 drilling rigs is down from 98 in February 2012.  Though the rig count is down 31%, 68 drilling rigs is still a lot. And the productivity of each rig is up, and that has moderated the decline in the number of gas wells drilled.

Though the number of drilling rigs working in Pennsylvania is down 31%, the gas produced during 2012 in Pennsylvania is up 69%, as many new wells begin sending gas into the market.  All that new gas contributed first to the crash in gas prices and then the decline in drilling rigs.

With the collapse in gas prices in 2012, while oil prices remained high, drilling rigs moved to oil and wet gas areas of the Marcellus and the nation. Now the direction of prices has reversed.  Gas is up from about $1.80 per thousand cubic feet in April 2012 to nearly $4 today.  Prices in the $4 to $5 range are likely to stabilize and grow modestly the gas drilling rig count going forward.

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