Posted on 03/17/2010 5:54:47 AM PDT by Recon Dad
Every Friday, Baker Hughes (NYSE: BHI) releases its estimate of the U.S., Canadian, and international rig count. Usually, I let these updates go without comment, as the weekly changes are small. The "big picture" trends only come into focus when you zoom out and look at months' or years' worth of data. I think I've done a good job of documenting one of these phenomena, but a poor job of alerting you to another. Something in Friday's release really snuck up on me. I should have been paying better attention.
The first key trend is the dramatic shift from vertical to directional and horizontal drilling. Drilling in tight gas shales used to be thoroughly unconventional. Following the success of Mitchell Energy (acquired by Devon Energy (NYSE: DVN) in 2002) and others in the Barnett shale, however, it didn't take long for shale plays to dominate the drilling landscape. Nowadays, it seemingly takes a contrarian to avoid the shale and granite wash plays that firms like Chesapeake Energy (NYSE: CHK) and EnCana (NYSE: ECA) are exploiting so eagerly.
A year ago, there were 468 vertical rigs and 658 directional/horizontal rigs running in the U.S. Today, those numbers are 489 and 918, with the horizontal rig count up 63%.
With my early coverage of plays like the Marcellus and the Eagle Ford, as well as international developments, I like to think that I have kept Fools well-apprised of key shale gas goings-on. An area where my coverage could have been better over the past few years is in the Bakken and other onshore oil plays.
To be fair, I have mentioned the Bakken in 34 separate articles since 2008. I quoted EOG Resources (NYSE: EOG) in my first mention of the play, saying it would someday be recognized as "a very, very big oilfield." I also told you that the Bakken was blooming in mid-2008. So this hasn't been a huge blind spot, exactly. I just haven't necessarily given the play -- and participants like Continental Resources (NYSE: CLR) and Whiting Petroleum (NYSE: WLL) -- the attention they might deserve.
If I'd kept a closer watch on oil drilling activity in the Bakken, in addition to places like the Permian Basin, I don't think I would have been caught so off guard by the following statistic: U.S. oil-directed rigs are now at an 18-year high. Mea culpa, Fools. I will be sure to keep a closer eye on the onshore oil scene going forward
The Haynesville shale is looking real good and it is near existing natural gas transmission lines through Henry Hub.
A lot of new millionaires in Northern Louisiana.
Lot of new trucks being sold around there for sure.
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