Shale, unconventional activity pushes rig counts higher across North America

By Phaedra Friend Troy

The number of rotary drilling rigs in the US and Canada increased by 182 rigs this week to 2,122 rigs, reports international oilfield services firm Baker Hughes Inc. (NYSE:BHI).

US rigs keep drilling

In the US, the number of drilling rigs onshore climbed by five units to 1,661 rigs, and another offshore rig started work in the Gulf of Mexico, bringing the total offshore units to 25. Combined with the rigs working inland waters, there are 1,700 drilling rigs operating in the US this week.

The state with the most rigs drilling continues to be Texas with 733 units, an increase of two during the week. Utilizing the interactive rig mapping tool Baker Hughes offers, it is apparent that most rigs working in Texas are employed in the Permian Basin of West Texas, Eagle Ford of South Texas and Haynesville Shale of East Texas, with some rigs also active in the Barnett Shale near Fort Worth and the Anadarko Basin in the Panhandle.

The state with the second most rigs, Louisiana has 168 rigs working in it. Home to the Haynesville Shale, as well as extensive inland and offshore drilling, Louisiana had the biggest drop, with eight rigs stopping work in the state.

Close behind, Oklahoma has 164 rigs drilling primarily in the Anadarko Basin, Arkoma Basin and Sedgwick Basin. Also, North Dakota, boasting ramped up activity in the Bakken, has 151 rigs active in the state. With activity across the massive Marcellus Shale play, Pennsylvania has 103 active drilling rigs.

Shale, unconventional resources boost rig numbers

Activity in the vast shale plays and unconventional reservoirs across the US and Canada has helped to boost rig counts.

The majority of the wells being drilled are horizontal with 966, and there are 211 wells that are directional. The number of vertical wells is 523. Making shale and unconventional commercial, horizontal drilling is combined with multi-stage hydraulic fracturing to free trapped hydrocarbons from tight formations.

An emerging trend, producers are redirecting exploration and development budgets from other regions into the shale plays onshore the US.

For example, companies have started to unveil 2011 capex budgets, and many are increasing drilling and activity in the shale plays. Hess (NYSE:HES), for example, is bumping the number of rigs it employs in the Bakken, as well as investing in exploration drilling in the Eagle Ford Shale.

Additionally, Canadian firm Pioneer Natural Resources (NYSE:PXD) sold its Tunisian assets to OMV for $866 million and revealed that the proceeds would be invested in drilling and activities in the Spraberry formation of West Texas and the Eagle Ford Shale of South Texas.

The rush for shale is so rampant that producers are lining up for fracturing services, and many are forming their own divisions to speed up development, the Oil & Gas Journal recently reported.

Canada drilling heats up

With an increase of nearly 72 percent, the number of drilling rigs in Canada jumped by 176 rigs to 422 units working in the country.

As the winter season sets in across Canada, activity picks up because drilling rigs and heavy equipment are able to be moved to drill sites across frozen roads.



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