Must-know: Why natural gas rig counts were weak
Last week's US rig count restored confidence in energy production (Part 7 of 7)
Gas rigs are down again
The U.S. natural gas rig count was down by two rigs—from 340 to 338—during the week ending September 12. The Eagle Ford and Cana Woodford each lost two rigs last week.
This was the first decline in weekly rig count after five consecutive weeks. Rig counts have been in a downward trend for about three years.
Gas rigs are still down year-to-date
Natural gas rigs have decreased for most of 2014. At the beginning of the year, natural gas rigs totaled 372. Currently, there are 338 rigs. This represents a decrease of 34 rigs, or ~9%. For the same period in 2013, weekly natural gas rig counts dropped by 38, or ~9%.
In 2014, most of the decline in natural gas rigs came from the Eagle Ford at -19, the Cana Woodford at -14, and the Mississippian at -5. Year-to-date (or YTD), the Granite Wash added the most rigs to its natural gas rig tally. It added +18.
The drop in natural gas rigs YTD continues the downward trend that started in late 2011. Natural gas rigs topped ~930 in October 2011.
Key stocks and ETFs
The number of natural gas rigs can indicate major natural gas producers’ sentiment towards drilling. Major natural gas producers include Chesapeake Energy (CHK), WPX Energy (WPX), Southwestern Energy (SWN), and CONSOL Energy (CNX).
Some natural gas producers are part of energy exchange-traded funds (or ETFs) like the S&P Oil & Gas Exploration & Production ETF (XOP).
Check out our Energy & Power sector page for more interesting articles on the industry. Learn what’s been happening lately in the sector.
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