The following is excerpt from John Kemp | October 12, 2012 | Reuters.com |
(Reuters) – Frantic drilling activity across the United States has at last begun to moderate, as the industry responds to the plunge in prices for natural gas and now liquids such as butane and natural gasoline.
Production companies have switched towards oil-rich and liquids-rich plays since 2008, driven by the gas glut and falling gas prices. But now the number of rigs targeting oil and condensate plays also appears to have peaked.
Between July 2008 and July 2012, the number of rigs drilling for gas fell by almost two thirds, from 1,555 to just 522, while the number of rigs targeting oil rose four-fold, from 393 to 1,427, according to oilfield services company Baker Hughes, as the industry responded to a record oil/gas price ratio (Chart 1).
Rigs shifted from dry-gas plays such as the Barnett shale underneath Fort Worth in Texas to wet-gas plays such as Eagle Ford in south-west Texas, where methane is found in association with heavier molecules like ethane, and oil-rich plays like North Dakota’s Bakken.
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