Why you should monitor US rigs topping past two years’ counts (Part 6 of 9)
Natural gas rigs
The U.S. natural rig count was up by five rigs, from 316 to 321, during the week ending August 15. Most of the increase in the rig count took place in the Marcellus—three rigs were added.
Rig counts are down year-to-date
Natural gas rigs have decreased throughout 2014. At the beginning of the year, natural gas rigs totaled 372. The current natural gas rig count of 321 represents a drop of 51—or ~14%.
Most of the decline in natural gas rigs came from the Eagle Ford at -20, Cana Woodford at -13, and Marcellus -13.
The drop in natural gas rigs year-to-date (or YTD) represents the continuation of a trend that has been ongoing since late 2011, when natural gas rigs topped 900.
The number of natural gas rigs can indicate the sentiment of major natural gas producers like Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and Range Resources (RRC). Many of these producers are also part of energy exchange-traded funds (or ETFs) like the S&P Oil & Gas Exploration & Production ETF (XOP).
However, while the number of gas rigs in the U.S. has been declining, the production of natural gas continues to increase.
The next part in this series will discuss why natural gas production continues to increase even as the number of gas-targeted rigs decrease.
Browse this series on Market Realist:
- Part 1 - Must-know: Why the US total rig count added 5 last week
- Part 2 - Onshore rig counts increased to their highest level in 2 years
- Part 3 - Why horizontal rig counts show no signs of pulling over
- Natural gas