Why watch US rig counts as oil rigs more than make up for declining gas rigs (Part 5 of 6)
Year-to-date counts significantly down as gas rigs further dropped by five last week
The U.S. natural rig count declined by five rigs, from 318 to 313, during the week ending August 1. Most of the decrease in the rig count took place in the Eagle Ford at -4 and Granite Wash at -2.
Natural gas rigs have decreased throughout 2014. At the beginning of this year, natural gas rigs drilling totaled 372. The current natural gas rig count of 313 represents a drop of 44, or ~12%.
Most of the decline in natural gas rigs came from the Eagle Ford at -21, Cana Woodford at -13, and other areas outside of the major classified plays at -16.
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.
Natural gas rigs drilling can indicate the sentiment of major natural gas producers, such as Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and Range Resources (RRC). Many of these names are also part of energy exchange-traded funds (or ETFs) such as 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 rise.
Continue reading the next part in this series to learn why natural gas production continues to increase even as the number of gas targeted rigs fall.
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