Horizontal Drilling For Gas On Increase in U.S.

The following news from the Energy Information Administration supports the increasing activity and importance of horizontal drilling to produce natural gas, primarily from shale rocks in the lower 48 States of America. Source: http://www.eia.doe.gov/oog/info/ngw/ngupdate.asp

Peter

Horizontal Natural Gas Rigs Reach 2½ -Year High. The number of horizontal natural gas rigs totaled 605 as of May 14, 2010, according to Baker Hughes Incorporated data. This level is the highest over the last roughly 2½ years for which data are available. Currently, horizontal rigs comprise 64 percent of the natural gas rig count, which totaled 951 as of May 14. Vertical and directional rigs account for 20 percent and 16 percent of this total, respectively. The vertical rig count has fallen in terms of percentage share as well as absolute value during the period for which data are available. Totaling 191 as of Friday, the vertical natural gas rig count has fallen precipitously from its level of 772 on January 4, 2008. This decline in the vertical rig count has contributed to a decrease in the overall level of natural gas rigs of about 500 since the beginning of 2008. However, growth in horizontal natural gas rigs has partially offset this decline.

The increase in horizontal rigs is largely attributable to efficiency gains in drilling and production of natural gas in shale formations. Key growth areas include the Appalachian Region (Marcellus Shale), and the Louisiana-Mississippi Salt Basins Region (Haynesville Shale). Since 2008, the natural gas rig count in these basins has grown overall, in contrast to most other basins. As of May 14, rigs have grown 34 percent in the Appalachian Basin, since January of 2008 to 115 as of May 14, while in the Louisiana-Mississippi Salt Basins, rigs have grown 116 percent to 147.