North American rig counts jump on shale, unconventional activities

By Phaedra Friend Troy

According to the weekly rig report from oilfield services firm Baker Hughes Inc. (NYSE:BHI), the number of rotary drilling rigs in North America has jumped by 57 this week to 2,334 units working.

In the US, the number of onshore rigs climbed by 10 to 1,671 units this week. Furthermore, the number of inland water rigs increased by one to 15 rigs; and two more offshore rigs became active in the US Gulf of Mexico, bringing the number to 27.

The state with the biggest jump this week was Texas, increasing by 10 units to 741 rigs drilling across the state. The state with the most rigs drilling by far, Texas exploration and production is supported by natural gas drilling in the Haynesville Shale and Barnett Shale formations, oil and liquids-rich drilling in the Eagle Ford Shale of South-Central Texas; and oil and gas drilling in the Permian Basin of West Texas. Additionally, there are four rigs working in the Gulf offshore Texas.

With an increase of four rigs this week, Oklahoma has 168 active drilling rigs in the state. Supported by ramped up activity in the Woodford Shale, the number of drilling rigs active in Oklahoma has increased by 63 year over year.

Additionally, Louisiana gained three drilling rigs this week – one onshore and two offshore. Across the state, there are 146 land rigs drilling mostly for natural gas in the Haynesville Shale, and 23 offshore rigs drilling in the waters of the Gulf of Mexico.

Expected to surpass Alaska in oil production within the next decade due to the highly prolific Bakken Shale play, North Dakota has 155 active drilling rigs in the state. Nearly doubling the number of active units in one year, all of the rigs are drilling for oil, and 92 percent are drilling horizontally.

On the other hand, Pennsylvania lost five rigs this week, dropping to 98 units actively drilling. Although the price for natural gas is lower than most producers would like, the number of drilling rigs active in the Marcellus Shale of Pennsylvania is drastically up over the last five years. Proof of increased activity across the unconventional play, for the same week in 2005 the number of active drilling rigs in Pennsylvania was 10; in 2006 and 2007, the number of rigs were 16 and 15, respectively. In 2008, the number increased to 20 rigs; and in 2009, the number of active rigs climbed again to 26. The next year, that number increased to 64 rigs drilling in Pennsylvania.

In Canada, the number of drilling rigs increased by 44 to 621 this week -- an increase of 126 for the year. Split onshore and off, there are 618 rigs working onshore and three rigs drilling offshore Newfoundland.

Drilling activity in Canada increases during the winter because rigs and heavy equipment are able to be mobilized to exploration and development sites when the roads are frozen solid.

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