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Issue Summaries

 Rig Counts 

Background

Natural gas drilling activity continues to outpace oil drilling, according to the U.S. Energy Information Administration (EIA). The completion of about 32,000 gas wells per year in 2007 and 2008 marked the highest number of gas wells completed in the EIA records in annual periods and marked five record setting years. Beginning in 1993, gas well completions have exceeded oil well completions for 15 straight years.

Every year, a small portion of the producing gas wells in America stop producing due to the depletion of their reservoirs. As this occurs, new wells are drilled and completed by operating rigs looking specifically for natural gas. That number of operating gas-seeking rigs has varied from 400 to 1,500 during the past ten years.

AGA Viewpoint

Technology has vastly improved drilling rig efficiency since the early 1980s, enabling exploration companies to find and produce more gas with fewer rigs. Additionally, exploratory tools such as three-dimensional (3D) seismic technologies enable geologists to see a more detailed picture of geological formations in the subsurface. This allows the locations and depths of wells to be pinpointed, thus reducing the number of dry holes and the environmental impact as well.

Working rigs today drill more wells than a decade ago, and gas is recovered more efficiently in each well. In addition, today, about 80 percent of the drilling rigs operating are seeking natural gas.

Such technological and efficiency improvements show that a return to the rig counts of the early 1980s is not necessary to produce adequate supplies of oil and natural gas. However, rig counts over the 1,000 level in the foreseeable future (with the majority searching for natural gas) will be necessary to maintain reserve replacements and ensure the availability of long-term domestic supplies of natural gas.

AGA Contact: Chris McGill, (202) 824-7132, cmcgill@aga.org

 
 

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