Drilling rig counts are closely watched as an indicator of where, and how much, drilling is happening in a given geography. Last Friday, Baker Hughes reported that rig counts for Pennsylvania continue to decline from a year ago, while the numbers for West Virginia are going up. But that doesn’t quite tell the whole story.
Houston-based oilfield services company Baker Hughes Inc. reported Friday that there were 95 drilling rigs operating in Pennsylvania, down one from the previous week. That’s also down from 108 a year earlier and from a peak of 116 reached in summer 2011.
There were 22 rigs in West Virginia last week, up one from the previous week and up four from a year ago.*
MDN doesn’t think that brief blurb in the mainstream media really tells the story. We analyzed rig counts for the second week of May going back four years to when Marcellus drilling was just starting to take off. Here’s a chart that puts it in perspective:
Notice that PA is now trending down, but at the same time, Ohio and West Virginia are trending up. One might conclude, with good reason, that rigs are moving from dry gas areas in PA to wet gas areas in OH and WV. If you add together the totals for each year, you’ll find this: 2009 – 58 rigs; 2010 – 107 rigs; 2011 – 135 rigs; and 2012 – 133 rigs. So the “real” news is that even with historically low commodity prices for natural gas, the number of drilling rigs year over year in the Marcellus and Utica Shale region is virtually unchanged.
They’re moving the chess pieces around a bit, but all of the pieces are still on the board.
*Binghamton (NY) Press & Sun-Bulletin/AP (May 14, 2012) – Drilling rigs down in Pa., up in W. Va.